Service Tax Upheld for Photography Services on CD despite Companies' Arguments

The tribunal upheld service tax demands against two companies providing photography services, despite their arguments that their services did not fit the definition of photography. The tribunal determined that loading images on a CD constituted photography services under the law. Additionally, the companies' claim of a reasonable belief their services were not taxable was rejected, leading to the application of the extended assessment period. Consequently, the tribunal found no basis for intervention and dismissed the appeals, affirming the service tax demands against the companies.

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Issues:
Service tax demands upheld for two companies for alleged wilful misstatement and suppression of facts regarding photography services.

Analysis:
The appeals were filed against orders-in-appeal upholding service tax demands against two companies for providing photography services without paying service tax. The first company contended that it only provided image editing services and did not print photographs, while the second company claimed to mend and scan old photographs without printing them. Both companies argued that their services did not fall under the definition of photography. However, the tribunal referred to the definition of a photography studio or agency under Section 65(79) of the Act, which includes professional photographers or commercial concerns engaged in photography services. The tribunal noted that even if the companies did not provide printed photographs but only loaded images on a CD, they still fell under the definition of a photography studio or agency, as they were engaged in taking or processing photographs. The tribunal emphasized that the companies clearly provided services in relation to photography and were covered under the scope of photography services.

The tribunal further clarified that the companies' contention of being under a reasonable belief that their services were not taxable was untenable. It stated that a reasonable belief is based on the perspective of a reasonable person in an appropriate environment and not a hallucinatory belief. Therefore, the extended period for tax assessment was deemed applicable along with its consequences. Ultimately, the tribunal found no infirmity in the impugned orders to warrant appellate intervention and dismissed the appeals.

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