Service Tax on Advertisement shown on film screen in theatres
THE JS(TRU) in his letter D.O.F. No. 334/15/2014-TRU dated 10th July, 2014 while informing the changes in Service Tax by the Union Budget 2014-15 mentioned -
2.1.1 Service tax leviable currently on sale of space or time for advertisements in broadcast media, namely radio or television [section 66D (g) read with section 66B], is proposed to be extended to cover such sales on other segments like online and mobile advertising. The new levy would further extend to advertisements in internet websites, out-of-home media, on film screen in theatres, bill boards, conveyances, buildings, cell phones, Automated Teller Machines, tickets, commercial publications, aerial advertising, etc. Sale of space for advertisements in print media, however, would continue to be in the negative list and hence remain excluded from service tax. Print media is being defined in service tax law for the purpose. This change will come into effect from a date to be notified later, after the Finance (No.2) Bill, 2014 receives the assent of the President.
A Consultant informed DDT that some multiplexes have started collecting service tax from 6th August 2014 (i.e. the date of Presidential Assent to Finance Bill, 2014) on advertisement displayed on screens and wanted us to share the notification which imposed this levy from the said date.
We too were surprised with the speed with which the notification was issued, if it really was!
DDT made enquiries with the Ministry and has learnt that no such notification has been issued as of now.
So, why this haste - hopefully they will be paying it to the department the coming month. There should not have been any interpretational issues as the TRU letter is crystal clear on this point. Perhaps the jurisdictional authorities should explain the fallacy to the multiplex owners - Less government more governance and some Trade facilitation!