RCM on Fees paid to Ministry of Broadcasting

[ROHIT GOEL]

Dear Sirs,

One of our clients runs a TV Channel and has paid fees of ₹ 1 lakh to Ministry of Broadcasting for change in name of their channel. Whether RCM is payable on same under Notification No. 13/2017- Central Tax (Rate)?

[Rajagopalan Ranganathan]

Sir,

The list of services on which tax is payable under RCM vide Notification No. 13/2017-CT (Rate) dated 28.06.2017 does not include fees payable to Ministry of Broadcasting for change in name. Hence no tax is payable under RCM. However in my opinion,the fees charged by Ministry of Broadcasting for name change cannot be treated as service and it is only sovereign function of the Government.

[YAGAY andSUN]

Even as per Company Law, payment of fees for change in name is adherence with statutory compliance. Hence, no fees under the provisions of GST Laws.

[KASTURI SETHI]

RCM is applicable on the following grounds :-

(1) Such transaction is a service to business entity.

(2) Your client does not fall under the exclusion clause at serial no.5 of Notification No.13/17-CT(R) dated 28.6.17 as amended.

(3) As per Section 2 (17) (i) of CGST Act, the term business includes any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities. Thus any activity or transaction undertaken by the Govt. in which they are engaged as public authorities shall constitute a supply leviable to GST if it is made against consideration except those transactions notified under Section 7 (2) (b) of CGST Act.

(4) Also not covered under Notification No.12/17-CT(R) dated 28.6.17 as amended.

No specific exemption is available. Hence in my view it is supply of service and RCM is applicable. Emphasis is on transaction.

[KASTURI SETHI]

In continuation, emphasis is on transaction, not falling in exclusion clause non-availability of specific exemption.

AI Summary

Reverse charge on administrative fees for statutory name-change depends on whether the levy is a government service or sovereign act. Whether reverse charge applies to Ministry of Broadcasting fees for channel name change depends on whether the charge is a sovereign/statutory compliance fee or a supply of service by a public authority; one view finds it outside the notified RCM list and non-taxable, while another treats it as a taxable supply not covered by exclusions or other notifications and therefore subject to RCM.