Service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 November 2015 We are LLP in film production Line. I want to know

-Whether service tax is applicable on us?

-if yes can we take cenvat credit for unregistered period under service tax.

-Whether we are liable for RCM service tax??

Rajesh Kumar

Rajesh Kumar (Expert)
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02 November 2015 Yes. Your services are liable to service tax. You are required to charge service tax from your customers and pay service tax.
You are eligible to take Cenvat Credit of all inputs/input services used in providing taxable service. It includes all goods and services except a few excluded services like cab, construction etc.
You are liable to pay Service Tax on reverse charge method on services covered under this provision.

Querist : Anonymous

Querist : Anonymous (Querist)

03 November 2015 Thanks.

But I come to know circular that temporary transfer or permitting the use or enjoyment of copyright
of cinematograph films for exhibition in a cinema hall or cinema theatre is exempt.

Also what is time limit for for taking cenvat credit.we are not register for service tax.

Rajesh Kumar

Rajesh Kumar (Expert)
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03 November 2015 That is correct. Temporary transfer of copyright is exempted vide entry 15 of mega exemption notification. If this is the only service provided, you dont need to pay service tax, and no registration is required.
If however some taxable services are also provided, you need registration and you need to pay ST. In that case you can take cenvat credit of input services. Time limit for taking credit is one year. Further, if you need to pay Service Tax on reverse charge mechanism, you will need to take registration and pay Service Tax.

Querist : Anonymous

Querist : Anonymous (Querist)

04 November 2015 ok. Currently film production in progress so no any income and no service tax liability. Hence we are not registered.It will take another 1 year to complete the work.can we take the credit of the service tax we have paid till now.

Rajesh Kumar

Rajesh Kumar (Expert)
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04 November 2015 It appears that you are exclusively in film production only and at this time there is no income stream. Still at this stage you need to pay Service Tax on reverse charge method on specified services like manpower supply, security, advocates, transportation of goods etc. If any of these is applicable you need to pay ST on RCM. You will need ST registration if any of these is applicable.
Regarding the future revenue stream, you need to examine taxability of film distribution. A recent circular has confused the issue more (F.No. 356/25/2013-TRU dated 15.05.2014). Further there may be other revenue streams like sale of music rights, advertisement revenue, sponsorship revenue etc. You will need to examine taxability of these streams.
You are eligible to take cenvat credit of inputs/services used in providing taxable services. That can be taken after taking registration.

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