Central Tribunal orders Star, Zee to pay service tax

MUMBAI: There are those in the industry who say this was a case that Star India and Zee Telefilms were bound to lose and so it panned out finally.

In a rare case of working for the same cause, both media companies had taken their legal battle to the Central Excise and Service Tax Appellate Tribunal (Cestat), Delhi after they were held liable to pay service tax in a ruling of the Commissioner of Central Excise (Appeals) Mumbai, dated 18 November, 2002.

In its final ruling given recently, Cestat rejected the appeals against the orders passed by the Commissioner of Central Excise in Mumbai. Both Zee and Star had argued that they were in fact operating as collection agents for their holding companies based abroad and therefore were not liable to pay service tax as far as ad revenues earned out of India were concerned.

The argument put forth by a high-profile battery of lawyers separately representing Zee and Star was that they worked on a commission basis and therefore their activities could not be termed as 'taxable service' as defined under section 65(72).

The argument put forth by Zee Telefilms was that it was only a representative of Asia Today Ltd. (ATL) and Expand Fast Holdings Ltd (Expand), Mauritius selling advertising space in India for its network channels. Star India's contention was on similar lines as far as its relationship to Satellite Television Region Limited (Star) Hong Kong was concerned.

The final ruling by the Central Tribunal closes the lid on what has been a lengthy appeals process and is bound to be an issue where the Indian Broadcasting Foundation will play a part as regards the service tax component that has to be billed into advertising that the channels book.

This is expected to become an even bigger bone of contention this year because the expectations are that in the next budget, the service tax charge will be hiked to 12 per cent from the current 8 per cent. It in fact went up from 5 per cent in 2002 to 8 per cent in last year's budget announcement.

When contacted for an official response, a senior Zee Telefilms executive had this to say: "The order does not put any liability on the company as we had been paying the service tax under protest for the period between 1999 and 2001 along with the other industry players."

The executive clarified that Zee was exploring the possibility of going in appeal against the Tribunal order. He, however added, "A final call on this would depend on the stand the IBF takes because it is an issue that affects everyone in the industry."

An official reaction from Star could not be elicited at the time this report was filed.

Latest Reads
TRAI tariff order’s impact on OTT content consumption

Amid debates over the impact of TRAI’s new tariff order on the Indian pay-TV ecosystem, over-the-top (OTT) platforms have emerged as probable beneficiaries. Several reports have indicated that streaming services stand to gain from the change in cable TV pricing.

Television TV Channels Viewership
Enjoy Super Sundays on Star Gold with “The Khelkars” this VIVO IPL

Every Sunday, engaging all members of the family through the lens of a comic household discussion, TV stars Sandeep Anand and Sucheta Khanna, along with little young superstars Vishesh Bansal, Gauransh Sharma and Divyansh Dwivedi will entertain viewers with an exclusive feed – Super Funday.

Television TV Channels Music and Youth
Watch top Indian & International golfers in action LIVE on DSPORT at the Hero Indian Open 2019

DSPORT, a premium sports channel of Discovery Communications, will broadcast LIVE, the Hero Indian Open 2019 in India.

Television TV Channels Sports
Firstpost print launches campaign trails, a unique campaign that enables readers to cover elections as reporters

Firstpost print, the weekly newspaper recently launched by Network18, has announced a unique campaign – FP Campaign Trails.

Television TV Channels News Broadcasting
Shemaroo Entertainment’s yedaz collaborates with imagica

Shemaroo Entertainment’s licensing and merchandising brand, Yedaz – Bollywood Madness, has associated with India’s favourite theme park, Imagica.

Television TV Channels Music and Youth
BARC India integrates TV and OOH measurement

Broadcast Audience Research Council (BARC) India is integrating TV and out of home (OOH) TV viewership in its BARC India Media Workstation (BMW) software, starting this year.

Television TV Channels Viewership
Prasar Bharati survey to gauge demand for sporting events coverage soon

Prasar Bharati CEO Shashi Shekhar Vempati has revealed that a survey will soon be conducted to assess the demand for sports coverage on the public broadcaster’s platforms like Doordarshan (DD) and All India Radio (AIR). Vempati, however, pointed out that sports coverage by a public broadcaster is...

Television TV Channels Sports
Zee Telugu to launch new fiction show 'Akka Chellellu'

Zee Telugu is all set to launch a new fiction show, Akka Chellellu. The show is slated to commence from 25 March, on Zee Telugu and Zee Telugu HD during the 5.30-6 pm time slot.

Television TV Channels Regional
LF launches new show 'Dakshin Diaries'

Lifestyle channel LF has launched a new show Dakshin Diaries which includes avenues that are familiar but when explored reveals a curated mix of culture, cuisine, travel, music, and faith.

Television TV Channels Specialised and Niche

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories