GV Prakash Kumar appeals against service tax notice on his musical works! Here's what the Madras High Court responded...

(This article is authored by Alar)

The Madras High Court has ordered the Income Tax Department to respond to an appeal filed by renowned music composer GV Prakash Kumar, who has been notified by the GST Commissioner that he must pay service tax of Rs 1.84 crores on his musical compositions.

The order was issued after the single judge of the Madras High Court dismissed GV Prakash Kumar's petition against the notice and ordered him to respond to the notice sent by the GST Joint Commissioner within four weeks. Subsequently, GV Prakash Kumar filed an appeal in which he argued that he had permanently transferred the copyright of the music works to the film producers, thereby making them the legal owners of the works, and that it was therefore illegal to tax him.

It states that “copyright of musical works shall be permanently vested in the film producers and shall be their owners. Therefore, it was illegal to levy tax on him". However, the Income Tax Department has argued that an assigned copyright does not release the composer from paying service tax on his musical compositions.

The department has decided that the composer is the one who actually provides the service of creating the music works, and as such, he must pay service tax on his income. The government agency has also contended that the composer is entitled to a refund of the service tax that was paid by his clients.

The complainant's lawyer, Joseph Prabakar, has been instructed by Justices R. Mahadevan and Mohammed Shaffiq to hand over all relevant documents to GST Intelligence's legal team. They've also said they'll hear the appeal in two weeks. It's pertinent to note that on February 2nd 2023, a sole judge rejected GV Prakash Kumar's writ petition, along with those of A.R. Rahman and C.R. Santhosh Narayanan.

Despite the judge's approval of AR Rahman's and Santhosh Narayanan's mandated pleas of the GST authorities' tax demand, only GV Prakash Kumar was given leave to respond to the officials in court because he had sought relief before the show cause notice was issued. After Justices Mahadevan and Mohammad Saffiq heard the appeal, they adjourned the case and gave the GST Joint Commissioner, four weeks to respond.