Vat / Service tax on Digital Royalty

[Guest]

We have receiving digital royalty for music  content  from various parties/ telco’s  . I  would like to know which  taxes applicable for digital royalty  income? ( Service tax  or  VAT  or  Both  )

[YAGAY andSUN]

Service would be applicable on such transactions as VAT laws does not recognised Royalty as Intangible goods at par with DEPB, Advance Authorisation untill unless you are selling the music content on some sort of physical medium such DC, DVD etc.

 

AI Summary

Service Tax Applies to Digital Music Royalties; VAT Not Applicable Unless Sold on Physical Mediums Like CDs or DVDs. A query was raised regarding the applicable taxes on digital royalty income from music content, specifically whether service tax, VAT, or both apply. The response clarified that service tax would be applicable, as VAT does not recognize royalty as intangible goods unless the music content is sold on a physical medium like CDs or DVDs.