A service tax exemption is followed if a music composer who is the sole owner of the copyright of his works assigns the rights to the concerned film producer. In this case, the GST Commissioner has sent a notice in 2019 that famous music composer A.R. rahman has to pay a service tax of Rs.79 lakhs.
In february 2020, music composer A.R. requested to cancel this notice. rahman filed a case in the madras High Court. He had stated in the petition that after permanently giving the copyright of the music works to the film producers, they were the owners and it was illegal to collect tax from him. He had stated in the petition that the GST Commissioner had sent a notice to him to tarnish his reputation and imposed a penalty of Rs 6 crore 79 lakh for non-payment of tax.
Judge Anita Sumant, who heard the petition, had ordered an interim stay on the GST Commissioner's notice. When the case came back for hearing, the GST. A reply was filed by the Commissioner. In it, it has been stated that the notice was sent to AR Rakhuman based on the evidence of tax evasion and there was no intention to tarnish his reputation. According to the reply petition, the tax was levied on the basis of the information collected by the GST Investigation Unit and the penalty was imposed for non-payment.
While perusing the contracts with the producers and the statements obtained from them during the investigation, only the music notes were found by A.R. It was found that rahman did not provide the music and recorded it using the services of lyricists, singers, instrumentalists, and technicians.
In the reply petition, it was requested that this case, which was pursued without getting a solution after appealing to the GST department, should be dismissed and the interim stay imposed on the collection of tax and penalty should be removed. After hearing arguments from both sides, the judge adjourned the verdict on the case to date.
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