Circular No. 78/08/2004-ST
23rd March 2004
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Sub: – Service Tax on the production of Television serials
Representation have been received in the Board with regard to levy of service tax on the activities undertaken by the television serial producers, who either
(i) sell TV serial episodes to the TV channels
(ii) allow such episodes to be telecasted by the channels in the lieu of procurement of Free Commercial Time (FCT), which is sold by them to advertising agencies for showing advertisements.
2. It appears that in some jurisdiction service tax is being demanded on the services listed at (‘i’) under the category of Videotape Production Services, and in respect of services listed at (‘ii’) under the category of Advertisement Agency Services.
3. The issue has been examined. The taxable service i.e. “video tape production service” is on the process of recording of any programme, event or function on magnetic tapes (including editing thereof). The tax is therefore limited to the technical function of recording or editing what is recorded and not on the entire gamut of production of serials. In case the producer hires a video-grapher or an editor, the payment made fro services would be taxable at the hands of such service providers. However, no tax is leviable on the producers for selling the serial to channel.
4. Similarly, in case of FCT, selling the time allotted to a producer does not fall within the purview of “advertisement service” since this activity is not connected to making, preparation, display or exhibition of advertisement. This is akin to providing space in a newspaper or magazine for publishing an advertisement and has nothing to do with actual presentation of the advertisement.
5. The field formations may suitably be informed.
6. Trade Notice may be issued for information of the trade.
7. The receipt of this Circular may kindly be acknowledged.
8. Hindi version will follow.
Deputy Secretary to the Govt. of India