DTH services liable to pay service and entertainment tax: SC
The entry deals with taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
A bench of Justices B V Nagarathna and N Kotiswar Singh said broadcast was a service and liable to service tax imposed by Parliament and the activity of entertainment under Entry 62-List II in the Constitution.
New Delhi, May 22 (PTI) The Supreme Court on Thursday ruled that state legislatures and Parliament can levy entertainment tax and service tax respectively on DTH services provided to consumers.
The top court said no entertainment could be presented to the viewers unless the broadcaster transmitted the signals for instantaneous presentation of any performance, film or any programme on their television.
'Thus, there are two aspects in this activity — the act of transmission of signals of the content to the subscribers. The second aspect here concerns not only the content of the signals, but the effect of the decryption of the signals by the set-top boxes and the viewing cards inside these boxes provided by the assessees to the subscribers, which is providing and receiving of entertainment through the television,' the bench said.
Without the apparatus provided for by the assessees to decrypt the signals, the court noted, the subscriber would not be able to watch the transmitted content, which is consumed for entertainment.
'The television entertainment provided by them through their modus operandi, i.e., by broadcasting, is a luxury within the meaning of Entry 62 – List II,' the bench said.
The DTH operators engaged in the activity of providing entertainment were liable to pay service tax on the activity of broadcasting under the provisions of the Finance Act, 1994, being further liable to pay entertainment tax, it held.
The verdict came on a batch of appeals against high court orders which held that levy of entertainment tax was unconstitutional.
Another batch of appeals filed by DTH operators challenged the provisions of the respective state Acts levying entertainment tax on them.
The operators argued that they were not liable to pay entertainment tax (or luxury tax) under the respective provisions of the state enactments as they were broadcasting signals, etc., through television channels to the subscribers. PTI PKS PKS AMK AMK
This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
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