There are different scenarios in which the training or workshop for dance training occurs in the market.
Primarily there are 2 scenarios
1. A trainer provides service of dance classes and may be he is receiving salary or fees from the dance class or fees from the trainees itself. These 3 cases are considered below
- When the trainer receives salary from the dance class which means that such trainer is under Employment and thus No GST to be levied on the income. [As such supply is negative listed supply under Schedule III of CGST Act]
- When the trainer receives payment in form of fees from dance class then such trainer is giving service to the institute or academy and is liable to take GST Registration if Turnover exceeds the threshold of 20Lakhs or 10Lakhs in some special category states. Once registration is obtained such person is liable to pay GST @18%.
- When the trainer receives payment in form of Fees directly from the students then it is again providing service to the students and is required to obtain registration as per turnover threshold of 20Lakhs or 10Lakhs for Special Category states. The GST what he is liable to pay is @18% as in case b above.
2. Second is a new scenario wherein
- The trainer is running Dance Workshops. They have a space as dance studio with all necessary equipment.
- They run ads on social media platforms like Instagram and facebook. Also they post reels from where they get the queries and registrations from the students.
- Workshops are conducted by other dancers as well and they come to the studio and conduct the workshop from the studio. They have revenue sharing model of may be 60:40 or 70:30 or so. The promotions, registrations and everything is provided by the dance studio itself as they are having all the facilities.
In the second case studio is required to take the GST Registration as the turnover reaches the threshold of 20 or 10Lakhs as the case may be. And in turn they have to pay the GST @18% on the receipts.
Note on Tax Planning
Once the dance studio satisfies the condition for being an ECO hefty amount of taxes can be saved on that.
Note on Exempt Dance Income
It is worth noting that Entry 80 and Entry 78 of Exemption Notification 12/2017 CT(R)Provides Exemption to dance activities but they are as:
Entry 80: Services by training or coaching in recreational activities relating to arts, culture, or sports by CHARTITABLE ENTITIEES registered u/s 12AA/12AB of Income Tax Act.
Entry 78: Services by an artist by way of performance in folk or classical art forms of: Dance, Music or Theatre where consideration does not exceed 1.5L. Usually dance workshops and dance classes does not fall in the above 2 entries and are hence not exempt. Various dance forms including Salsa, Western, Zumba or Even Classical is also Taxable unless they don’t fall in above 2 entries.
The author can also be reached at ca.khandelwalraghav@gmail.com
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