"sound recording studio or agency"means any commercial concern engaged in the business of rendering

Indian Service Tax

Sound Recording Service

Effective Date: 16/07/2001.

Authority: Notification No. 4/2001-ST, dt. 9/7/2001 (for full text of Notification see under Broadcasting).

Rate of Service Tax: 8% from 14/5/2003 (5% upto 13/5/2003). 10% from 10/9/2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.

Definitions: "sound recording studio or agency"means any commercial concern engaged in the business of rendering any service relating to sound recording; [Section 65 (99)]

"Magnetic Storage Device" includes wax blanks, discs or blanks, strips or films for the purpose of original sound recording, [Section 65 (63)]

Taxable service: Sound recording service provided by a sound recording studio to a client.

Value of taxable service: Gross amount charged from a client, but the cost of unrecorded magnetic tape or such other storage device, if any, sold to the client during the course of providing the service, shall not be included in the value of this taxable service.

Exemptions

(i) Reproduction of original master to make further copies of the audio tape or CDs

(ii) Lending/hiring of video/sound & recording equipment sub-contracting (iii) Sale of cassettes Person liable to pay: Sound Recording Studio or Agency.

Head of Account

Sl. Code SCCD Minor-head 004400140 Sound Recording Service 00440160 Sub-head 00440014001 Tax Collection 00440161 118 Sub-head 00440014002 Other Receipts 00440162 111 Sub-head 00440014003 Deduct Refunds 00440163 110

Questions & Answers

Q. 5.1 Whether lending/hiring of Video/Sound Recording equipment come under Service Tax?

Ans: The lendinglhiring of Video/Sound Recording equipment is in the nature of Sub-contracts and because the Sub-contractors are not providing the services to the customer directly, they are not required to pay the Service Tax.

[Source: Directorate of Publicity and Public Relations, Customs & Central Excise, New Delhi, October, 2003).

Main text of Departmental Circular/TN

1. As per Section 65(66), "sound recording" means recording of sound on a magnetic storage device and editing thereof, in any manner. As per Section 65 (72) (zj), taxable service is any service provided to a client by a sound recording studio or agency in relation to any kind of sound recording.

2. Any service provided by sound recording studio or agency in relation to recording of sound will be covered under the tax net. The activities which fall under the category of service are providing the facility of studio, technical persons, musical instruments and other devices or any other facility or all the facilities in a consolidated manner, required for recording of sound, editing thereof, providing different kinds of sounds from the sound library for use in theatre, films and radio etc., services for mixing of sounds, etc. The service charges that are paid for the use of these facilities and it is usually in terms of hours of usage. It is clarified that reproduction of original master to make further copies of the audio tape or CDs etc., will not come within the purview of service tax.