The Raga of Tax - Taxing Classical Music - Depraved?
USTAD Amjad Ali Khan, M. Balamuralikrishna, and Pandit Birju Maharaj are just three names among the gems of Indian art, culture and music - they will soon end up as Service Tax assessees.
As per Sl. No. 16 of Notification No. 25/2012-ST dated 20.06.2012, Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador were exempted.
In this Budget, by Notification No. 6/2015-ST dated 1.3.2015, this has been changed to "Services by an artist by way of a performance in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, if the consideration charged for such performance is not more than one lakh rupees":
Soon these greatest maestros may become offenders and maybe even summoned by a Superintendent of Service Tax. (I had seen a world famous engineering professor sitting on a bench outside a Superintendent's room, having been summoned there and told that the proceedings before the great authority was judicial and any disobedience will result in heavy penal action.)
If these artists, who are the pride of the Nation, charge more than a lakh of rupees for a performance, they are liable to pay Service Tax, take out a registration, file an online return and comply with all the complicated procedures. They can even be audited.
BN Gururaj, the famous advocate from Bangalore says,
In the drive of India for economic growth, India should not end up taxing its torchbearers of art and culture. India should not become so materialistic that it taxes musical and artistic performances. We would have to be a depraved society to do so.
Most artists get paid less than this sum (of one lakh rupees) and would be exempt. Only performers of high repute can hope to charge couple of lakh rupees or three lakh rupees per performance. How much Revenue does the government expect to earn by taxing a couple of dozen or few hundred performing folk and classical artists? Very often, the main artist would have to pay fellow artists out of his honorarium. Rs.1 lakh per performance is not a big fortune, which the government must tax.
This proposal is shameful to the society. The central government should drop this proposal and continue the unconditional exemption to folk and classical performing artists.