TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 704
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....escribed by the West Bengal Authority for Advance Ruling Regulations, 2018. 1. Admissibility of the Application 1.1 The Applicant intends to produce a feature film, a portion of which is planned to be shot at locations outside India. For this purpose, he is in the process of appointing CDI Virtual Films Inc. (hereinafter the CDIVF) as a Line Producer in Brazil. He seeks a ruling on whether he is liable to pay IGST on the reverse charge on the payments to be made to CDIVF and, if so, what should be the rate depending upon the classification of the service of a Line Producer. He also wants to know whether the reimbursements made on an actual cost basis will also be subject to IGST. 1.2 The questions raised are admissible for an advance ruling under section 97(2)(a), (b) & (e) of the GST Act, read with section 20(xviii) of the IGST Act, 2017. 1.3 The Applicant declares that the issues raised in the application are not pending nor decided in any proceedings under any provisions of the GST Act. The officer concerned from the revenue has raised no objection to the admissibility of the Application. 1.4 The Application is, therefore, admitted. 2. Submissions of the Applicant 2.1 The....
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....that the Applicant will reimburse CDIVF at the actual cost of procuring these services, based on the bills the service providers raise in the name of the feature film. 2.6 The Applicant also believes the services provided by the foreign suppliers or CDIVF are classifiable under SAC 999900 as services provided by extraterritorial organizations and bodies. 2.7 The Applicant argues that the service being that of an intermediary or else of an event manager, it fits the description of the services covered under sub-sections (3) to (13) of section 13 of the IGST Act, 2017. The place of supply of the service provisioned from CDIVF is, therefore, the location of the supplier in terms of section 13(2) of the IGST Act, 2017. The location of the supplier being in Brazil, the place of supply is not in India, and the transaction is not 'import' within the meaning of section 2(11) of the IGST Act, 2017. The transaction with CDIVF does not, therefore, constitutes an inter-state supply within the meaning of section 7(4) of the IGST Act, 2017. No tax, therefore, is payable under Notification No. 10/2017 - IGST (Rate) dated 28/06/2017. 2.8 Moreover, the Applicant argues that the place of supply b....
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....er countries, services provided by international organizations such as the United Nations and its specialized agencies or regional bodies, etc., the Organization of American States, the European Union, the African Union, the League of Arab States, the Organization for Economic Cooperation and Development, the World Customs Organization, the Organization of Petroleum Exporting Countries and other international bodies or extraterritorial units (refer to Explanatory Notes on Classification of Services; cbic.gov.in). Service of CDIVF does not fit this description, and, therefore, cannot be classified under the above Head. 4.4 It is further argued that CDIVF is acting as a pure agent with respect to the services from the foreign suppliers that the Applicant reimburses on an actual cost basis. According to rule 33(iii), the supplies procured by the pure agent are in addition to the services he supplies on his own account. The Applicant does not specify what services, if any, CDIVF is supplying in addition to the ones for which he is 'purportedly' acting as a pure agent. If he was serving only as an intermediary between the Applicant and the actual offshore service providers, the value o....
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....er has the Tribunal examined whether these commercial services are intermediary in nature. This judgment does not, therefore, throw much light on the question of classifying the service of a Line Producer and, therefore, not applicable in the present case. 4.7 It is evident from the above discussion that the Contract, the Applicant's argument based on the Contract, or the judgment in the case of Yash Raj Film (supra) does not throw sufficient light on the role CDIVF plays as a Line Producer in the production of the film in offshore locations. He is alternately described as an intermediary service provider or an event manager. It is, therefore, pertinent to examine the role of the Line Producer, as understood in common parlance in the film industry. 4.8 A Line Producer is a key member of the production team for a motion picture. Typically, a Line Producer manages the budget of a motion picture. Alternatively, or in addition, they may manage the day to day physical aspects of the film production, serving a role similar to the 'unit production manager'. A Line Producer may also hire key members of the crew, negotiate deals with vendors, and is considered the head of the production. ....
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....r residual activities relating to shooting on location. He assists and collaborates with the filming crew of the Applicant in deciding on various issues relating to the physical production of the motion picture in the offshore locations, including insurance coverage of the local actors and crew. He also takes the risk of an accident occurring during the shooting. His service is, therefore, an integral part of the activity for the production of the feature film. 4.11 The Applicant himself submits that CDIVF is going to organize and manage the shooting in Brazil that will result in the emergence of a CD containing the audio-visual content, and retains as security all production rights and talent buy-outs for such production in Brazil till receiving the final payment from the recipient. Clearly, CDVIF cannot retain production rights and talent buy-outs, even as security, unless it is engaged in the production and realization of a motion picture, explicitly or implicitly protected by copyright, without a contract for outright sale. It is, therefore, provisioning motion picture production service classifiable under SAC 999612. It is, therefore, not an intermediary service. 4.12 The se....