CESTAT held that theatrical exhibition agreements between film...

CESTAT held that theatrical exhibition agreements between film distributors and multiplex operators do not constitute "Renting of Immovable Property Service" under Section 65(90a). The Tribunal found that exhibitors obtain theatrical exhibition rights by paying distributors a percentage of net box office collections, rather than providing rental services. Following precedent in Moti Talkies v. Commissioner of Service Tax, CESTAT determined the essential service provider-recipient relationship was absent, as exhibitors pay distributors for screening rights rather than receiving payment for property rental. The revenue failed to establish the requisite quid pro quo relationship necessary for taxable service classification. Consequently, no service tax liability exists on the appellant exhibitor, and the impugned order was set aside with appeal allowed.

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