Photography and sales tax: own-material prints are a service, while processing customer film is taxable as a works contract.

Photographic work using the photographer's own camera, film and materials, where the negative belongs to the photographer and no work is done on the customer's property, is a contract of service and not a works contract; no sales tax is payable on that turnover. By contrast, developing customer-supplied exposed film or negatives and supplying positive prints falls within the inclusive statutory definition of works contract as processing, and the taxable element is confined to the value of the photographic paper transferred. The article thus distinguishes between purely service-based photography and processing of customer-supplied materials for sales tax purposes.

---

---

Issues: (i) Whether the activity of taking photographs using the photographer's own materials and delivering prints to customers is a works contract exigible to sales tax. (ii) Whether developing customer-supplied exposed film or negative and supplying positive prints falls within the definition of works contract and is taxable to the extent of the value of the photographic paper.

Issue (i): Whether the activity of taking photographs using the photographer's own materials and delivering prints to customers is a works contract exigible to sales tax.

Analysis: The photographic process involved the exercise of artistic skill and labour. In this category, the photographer used his own camera and film, and the negative belonged to the photographer, not the customer. There was no work upon pre-existing goods of the customer and no accretion to the customer's property or nucleus. Any transfer of photographic paper was merely incidental to the service rendered.

Conclusion: This activity was not a works contract and no part of the turnover from this category was exigible to sales tax.

Issue (ii): Whether developing customer-supplied exposed film or negative and supplying positive prints falls within the definition of works contract and is taxable to the extent of the value of the photographic paper.

Analysis: The statutory definition of works contract in the Kerala General Sales Tax Act, 1963 was inclusive and covered processing. In these categories, the photographer worked upon film or negative supplied by the customer and undertook processing to produce positive prints. The property in the photographic paper passed in the course of that execution, and the artistic-skill argument carried less force because the photograph had already been taken. The taxable element was confined to the value of the photographic paper transferred.

Conclusion: These activities fell within works contract, and the value of photographic paper involved in the transfer was exigible to sales tax.

Final Conclusion: The petitions succeeded only in part. The first category of photographic work was held outside the tax net, while the second and third categories were held taxable only to the extent of the value of the photographic paper; the assessments were set aside and remitted for fresh consideration on that basis.

Ratio Decidendi: Where a photographer works only with his own materials, the transaction remains a contract of service, but where he processes customer-supplied film or negative and transfers paper prints, the activity constitutes a works contract to the extent of the goods transferred.

---