Royality amount -Music Director

[Thevarkonda Suresh]

Whether royality amount received by music director in india under Servicetax period is taxable

[KASTURI SETHI]

Board's Service Tax Education Guide (Released on 1.7.12)

Guidance Note 7 - Exemptions

7.10.2 I am a composer of a song having the copyright for my song. When I allow the recording of the song on payment of some royalty by a music company for further distribution, am I required to pay service tax on the royalty amount received from a music company?

No, as the copyright relating to original work of composing song falls under clause (a) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 which is exempt from service tax. Similarly an author having copy right of a book written by him would not be required to pay service tax on royalty amount received from the publisher for publishing the book. A person having the copyright of a cinematographic film would also not be required to pay service tax on the amount received from the film exhibitors for exhibiting the cinematographic film in cinema theatres.

AI Summary

Copyright royalty exemption shields composer royalties from service tax on amounts received for permitting use or distribution. Royalty receipts by a copyright holder for permitting use or distribution of an original musical composition are exempt from service tax because the copyright in an original work of composition is covered by clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957, per the Board's Service Tax Education Guide.