Budget: Entertainment, amusement services exempted from service tax
The Government today placed "admission to entertainment or access to amusement services" in the Negative List – a new List for which there will be no service tax. Advertisements broadcast by television or radio, however, will be excluded from the Negative List. What could hurt is the increase in service tax from 10 per cent to 12 per cent proposed in the budget for 2012-13. Finance Minister Pranab Mukherjee in his budget speech for 2012-13 today announced exemption of the film industry from service tax on copyrights relating to recording of cinematographic films.
He said that this was being done "to add to the spirit of celebration" since the year 2012 marks the beginning of the centenary year of Indian cinema. He said: "Despite the change in titles from Dada Saheb Phalke's "Raja Harishchandra" to "Ra. One" in recent times, the industry has played a pivotal role in unifying our country in the wake of her considerable diversity." He said in addition to the negative list, there is a list of exemptions which include sportspersons and performing artists in folk and classical arts, apart from independent journalists.
The Negative List also contains selling of space or time slots for advertisements other than advertisements broadcast by radio or television; and betting, gambling or lottery. The Finance Minister also announced full exemption from basic customs duty for LCD and LED TV panels, and parts of memory card for mobile phones. He retained the lower merit rate of excise duty on mobile phones at one per cent.
The Finance Bill which formed part of the Budget documents described "entertainment event" as an event or a performance which is intended to provide recreation, pastime, fun or enjoyment, by way of exhibition of cinematographic film, circus, concerts, sporting event, pageants, award functions, dance, musical or theatrical performances including drama, ballets or any such event or programme.
"Amusement facility" is described as a facility where fun or recreation is provided by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks, theme parks or such other places but does not include a place within such facility where other services are provided. "Advertisement", the Bill says, means any form of presentation for promotion of, or bringing awareness about, any event, idea, immovable property, person, service, goods or actionable claim through newspaper, television, radio or any other means but does not include any presentation made in person.
The Bill says "betting or gambling" means putting on stake something of value, particularly money, with consciousness of risk and hope of gain on the outcome of a game or a contest, whose result may be determined by chance or accident, or on the likelihood of anything occurring or not occurring. The Bill also lists the declared services to include temporary transfer or permitting the use or enjoyment of any intellectual property right; and development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software. [Indiantelevision.com 16/03]