Valuation and taxation of photography service

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This query is : Resolved

mukesh chudiwal (Querist)

27 April 2012 Dear All,

I want to know how I should take value for charging service tax on photography service provided by color lab.

Whether one should deduct cost of paper, ink and chemical from gross receipt?

Whether there is any abatement for photography service?

Please advise and provide if any sample calculation of valuation of photography service??

Also is there Maharashtra VAT to be paid by Photography lab??

Prakash Kochar

Prakash Kochar (Expert)

01 May 2012 Maharashtra VAT may not be applicable considering as under -
As per decision in Rainbow Colour Lab (118 STC 9 SC) it was held that, photography transaction are related to work of Art and Skill, not involving dominant object of selling the goodstherefore this can not be liable to sales Tax.
In Associate Cement case (124 STC 59) issue was about definition of goods as per Custom Act, in this judgment SC doubted the correctness of judgment in case of Rainbow. Only doubts were raised but the judgment was not overruled. Commissioner of Sales Tax Maharashtra issued a Cir. No. 18T of 2001 dt 26.09.2001 taking clue from ACC judgment and informed that transaction from Photography will be liable as work contract.
C K Jidhees Vs. Unionof India (2005TIOL 135 SC) dt. 27.10.2005, was regarding service tax on Photography, wherein it was held that ACC case does not overrule judgment in case of Rainbow. There is no sale of any material hence full amount is service transaction in response to argument by appellant to bifurcate the amt. of service and cost of material.