Indian Company Formation


GST Council in its 27th meeting held on 4th…

GST Council in its 27th meeting held on 4th May’18

GST Return Simplification:

  • GSTR 1 and GTR 3B will continue for the next 6 months.
  • New Single-return plan will go live after 6 months. Thus, there will be only 12 returns a year, instead of 36 returns.
  • The GSTN shows the buyer, invoices uploaded by the seller and thus buyer can check the gap between the credit claimed by him and actually allowed to him.
  • After 6 months of the transition period, if it is noticed that after uploading the invoices, the seller has not paid the tax amount to the government, GSTN has all the right to recover these taxes from the buyer. There will be no automatic reversal of credit from the buyer in these cases.
  • Taxpayers (excluding a few exceptions like composition dealer and dealers having Nil transactions) shall file one monthly return. Return filing dates shall be staggered based on the turnover of the registered person to manage load on the IT system. Composition dealers and dealers having nil transaction shall have facility to file quarterly return.

Unidirectional Flow of invoices: There shall be unidirectional flow of invoices uploaded by the seller on anytime basis during the month which would be the valid document to avail input tax credit by the buyer. Buyer would also be able to continuously see the uploaded invoices during the month. There shall not be any need to upload the purchase invoices also. Invoices for B2B transaction shall need to use HSN at four digit level or more to achieve uniformity in the reporting system.


  • Sugar Cess implementation has been postponed. The government believes that there should be a better way to increase revenue for the benefit of the farmers.
  • Duties on Ethanol – Reduction in rate suggested.
  • A group of ministers expected to work on these two above mentioned points and make recommendations within two weeks.


Simple Return design and easy IT interface: The B2B dealers will have to fill invoice-wise details of the outward supply made by them, based on which the system will automatically calculate his tax liability. The input tax credit will be calculated automatically by the system based on invoices uploaded by his sellers. Taxpayer shall be also given user friendly IT interface and offline IT tool to upload the invoices.

No automatic reversal of credit: There shall not be any automatic reversal of input tax credit from buyer on non-payment of tax by the seller. In case of default in payment of tax by the seller, recovery shall be made from the seller however reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc.

Due process for recovery and reversal: Recovery of tax or reversal of input tax credit shall be through a due process of issuing notice and order. The process would be online and automated to reduce the human interface.

Supplier side control: Uploading of invoices by the seller to pass input tax credit who has defaulted in payment of tax above a threshold amount shall be blocked to control misuse of input tax credit facility. Similar safeguards would be built with regard to newly registered dealers also. Analytical tools would be used to identify such transactions at the earliest and prevent loss of revenue.

Transition: There will be a three stage transition to the new system of single monthly return.
Stage I shall be the present system of filing of return GSTR 3B and GSTR 1 (GSTR 2 and GSTR 3 shall continue to remain suspended). Stage I will continue for a period not exceeding 6 months by which time new return software would be ready.
In stage 2, the new return will have facility for invoice-wise data upload and also facility for claiming input tax credit on self declaration basis, as in case of GSTR 3B now. During this stage 2, the dealer will be constantly fed with information about gap between credit available to them as per invoices uploaded by their sellers and the provisional credit being claimed by them.
Under stage 3 (which shall commence after expiry of 6 months from date of implementation of stage 2), the facility of provisional credit shall be withdrawn and input tax credit shall be available only on the basis of invoices uploaded
by the supplier.

Content of the return and implementation: Return shall be simplified also by reducing the content/information required to be filled in the return. The details of the design of the return form, business process and legal changes would be worked out by the law committee based on these principles. Government is keen to introduce the simplified return design at the earliest to reduce the compliance burden on the trade in keeping with the philosophy of ease of doing business.

In addition, a Group of Ministers has been set up for the following:

  • to finalize the proposal of a concession of 2% in GST rates on B2C supplies applicable on digital payment subject to ceiling of INR 100 per transaction
  • to discuss the imposition of sugar cess and reduction of GST​​ rate on ethanol.

Further, GSTN (which is currently a private entity) has been proposed to be converted into a fully owned government company.

Incentives on digital payments

  • Incentives here may need more time to come in force. A 5 member council will work on this before the next council meet.

De-Privatization of GST

  • The GSTN will now be a government owned company with the central government holding 50% and state governments holding the balance 50% of the stake holding. The holdings by the state governments will be on pro-rata basis based on the GST ratios.
  • There is a scope for better employment as GSTN looks forward to recruit more people

Simplified return filing and ITC claiming process:

  1. A comprehensive single return with details of inward and outward supplies. This will reduce the number of returns, help in invoice matching and have all details in one place. Focus will be on making everything tech savvy, on the move and supporting the idea of Digital India.
  2. Simplified ITC claiming process is the need of the hour to avoid waiting for confirmations, acceptances from the recipient or tedious tasks of uploading sale/purchase details to avail the credit.


  1. A possible process wherein the E-Way bill is checked just once during transit
  2. Alternate lines for uploading details for generating EWBs in case of un-supported formats
  3. One-nation, one format for generating E-Way bill were states will avoid having their own forms in addition to the basic notified ones.

Reverse Charge Mechanism:

  1. Preponement of applicability of Reverse charge mechanism(Before June 30). This could be initially only for a particular class of taxpayers, say dealers under composition scheme.

Other points:

  1. Imposition of a cess on sugar to help farmers
  2. Include Real Estate/transfer of property into the GST regime
  3. Amendment of the ITC provision in the GST to enable any business to take credit on any business-related expenses (employee transport etc.)
  4. Exemptions for payments made by employees for the services received from the employers (eg: canteen services)
  5. Based on various adjudications on anti-profiteering norms under GST, some clarity is expected from the council
  6. Encouragement for digital transactions by providing cash backs, discounts, credits etc.


composition scheme


Composition Scheme

In order to reduce the burden of small businesses GST Council brought Composition Scheme

Thus, an option has been provided where they can opt to pay a fixed percentage of turnover as fees in lieu of tax


Eligibility For Composition Scheme

  • Whose turnover is below Rs 1.5 crore can opt for Composition Scheme.
  • In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75 lakh.
  • Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover

Who cannot opt for Composition Scheme

  • Taxpayer supplying exempt supplies.
  • Supplier of services other than restaurant related services
  • Manufacturer of ice cream, pan masala, or tobacco
  • Casual taxable person or a non-resident taxable person
  • Businesses which supply goods through an e-commerce operator


Conditions for Opting for Composition Scheme

  • No Input Tax Credit can be claimed by a dealer opting for composition scheme
  • The taxpayer cannot make any inter-state supply of goods.
  • The dealer cannot supply GST exempted goods
  • Taxpayer has to pay tax at normal rates for transactions under Reverse Charge Mechanism
  • If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
  • The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
  • The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.
  • Those supplying goods can provide services of up to Rs. 5 lakh,


How to Opt for Composition Scheme

>> This is to be done by filing GST CMP-02

>> After filing this form a Composition Dealer has to file GST CMP-03 within 90 days.

On successful submission, a success message is displayed along with the Application Reference Number (ARN).

How Should a Composition Dealer raise bill?

A composition dealer cannot issue tax invoice. This is because a composition dealer cannot charge tax from their customers. They need to pay tax out of their own pocket.

Hence, the dealer has to issue a Bill of Supply.

The dealer should also mention “composition taxable person, not eligible to collect tax on supplies”  at the top of the Bill of Supply.

GST Rates on Composition Dealer

Composition Scheme –Applicable GST rates:
Types of Business CGST SGST Total
Manufacturer and Traders (Goods) 0.5% 0.5% 1%
Restaurant not serving Alcohol 2.5% 2.5% 5%
Service providers are not eligible for Composite Scheme


How should GST payment be made?

GST Payment has to be made out of pocket for the supplies made.

The GST payment to be made by a composition dealer comprises of the following:

  • GST on supplies made.
  • Tax on reverse charge
  • Tax on purchase from unregistered dealer.

what are the returns to be filed by composition scheme?

A dealer is required to file a quarterly return GSTR-4 by 18th of the month after the end of the quarter. Also, an annual return GSTR-9A has to be filed by 31st December of next financial year.

Also, note that a dealer registered under composition scheme is not required to maintain detailed records.


Every Tax Reform had its own Advantage and Dis advantages

Advantages are*

  • Lesser compliance (returns, maintaining books of record, issuance of invoices)
  • Limited tax liability
  • High liquidity as taxes are at a lower rate

Dis – Advantage are*

  • A limited territory of business. The dealer is barred from carrying out inter-state transactions
  • No Input Tax Credit available to composition dealers
  • The taxpayer will not be eligible to supply exempt goods or goods through an e-commerce portal.


Looking at advantages and disadvantages, we can broadly say that composition levy is beneficial for small traders who want to avoid complexity and follow lesser compliance.

So, it is Advisable to get Guidance from Chartered Accountant regards”

  • How to file  GST CMP-02 as well GST CMP-03
  • To file a quarterly return GSTR-4 by 18th of the month
  • Annual return GSTR-9A has to be filed by 31st December of next financial year
  • how to create Bill of Supply invoices , debit , credit notes under composite scheme






No E Way Bill is required (exemptions)

No E Way Bill is required for the following Transactions:

Rule 138(14) provides for cases where no e-way bill is required to be generated:

(a) Where the goods being transported are specified in Annexure, as under:


[(See rule 138 (14)]


S.NO Description Of Goods
1 Liquefied petroleum gas for supply to household and non-domestic exempted category (NDEC) customers
2 Kerosene oil sold under PDS
3 Postal baggage transported by Department of Posts
4 Natural or cultured pearls and precious or semi-precious stones: precious metals and metals clad with precious metal (Chapter 71)
5 Jewellery, goldsmiths’ and silversmiths’ wares and other articles
6 Сurrency
7 Used personal and household effects
8 Coral, unworked (0508) and worked coral (9601)


(b) Goods transported by non –motorised conveyance, Ex. Horse carts

(c) Goods transported from customs port for clearance, Ex Airport, Air cargo complex, container freight, land customs station to an inland container

(d) Such areas notified by clause (d) of rule 138(14) SGST/UGST rules in that particular state or union territory

(e)All milk and dairy products other than De-oiled Products, Ex Curd, lassi, buttermilk, Fresh milk and pasteurized milk not containing added sugar or other sweetening matter

(f) Alcohol for human consumption, petroleum crude, high speed diesel, motor spirit,

(g) Where supply of goods under schedule III

Ex- Schedule III consists of activities that would neither be supply of goods nor service like

  • Service of an employee to an employer in the course of his employment,
  • Functions performed by MP, MLA etc.

(h) Where goods are transported under-

  • Custom bond from an inland container depot or a container freight station to a customs port,
  • From one customs station /port to another customs station/port

(i) Goods transit from or to Nepal or Bhutan

(j) Goods caused by Defence formations under ministry of Defence as a consignor or consignee

(k) Empty cargo container

(l) If Goods are transported to a weighbridge within 20kms and back to the place of business by being covered under a Delivery Challan

(m) Vegetables, Fruits, Unprocessed tea leaves and unroasted coffee beans, Live animals, plants and trees, Meat Cereals, Unbranded rice and wheat flour, Salt ,Items of educational importance (books, maps, periodicals


So, if a taxpayer falls under any of the above categories, he will not be required to generate an E-way bill. Though the taxpayers who fall under E-way bill exemptions are relieved of this compliance, they should ensure that the other documents like the invoice and bill of supply are in accordance with the rules and regulations.


The taxable person providing goods and or services shall not pay the tax on such goods and or services in respect of those supplies which are notified for absolute exemptions; it is Applicable for both Inter-state and Intra- state






Impact of GST On Film Production

Impact of GST On Film Production

Items falling under 18% tax rate

  • TV and DTH services, circus, theatre, and Indian classical dance (including folk dance and drama)
  • Services by way of admission to entertainment events or cinematography films in cinema theatres. These include movie tickets, movie festivals, casinos, racing, and any sports events (like IPL), etc. with ticket prices below 100 rupees

Items falling under 28% tax rate

  • Services by way of admission to entertainment events or cinematography films in cinema theatres. These include movie tickets, movie festivals, casinos, racing, any sports events (like IPL), etc. with ticket prices above 100 rupees.


Important lists of GST %

Particulars Rates
1.Flim Producers  
Sale of rights 12%
Non Perpetual Theatrical Rights- Domestic 12%
Non Perpetual – Satellite Rights 12%
Non Perpetual – Music Rights 12%
In Film Placement 18%
2.Flim Distributors
Lease to Exhibitors &Theatres 12%
Theatres 28% + Local levy
3.TV & Radio Channels
Lease of Programmes 12%
Artists, Directors & Technician 18%
Amusement Parks 28%
Entertainment Events 28%
Sports Events like IPL 28%


Circus, concert, theatrical performance & Drama 18% Exemption up to consideration for Admission of 250/- per person
Award Function, Musical performance 18% Exemption up to consideration for Admission of 250/- per person
Cable TV, DTH Services 18%
4.Television & Other content Producers
Outright sale 12%
Lease of content 12%
Print Media 5%
Renting of Hoardings 28%
Subscription Revenue 12%


The Industry will be entitled to use the Input Tax Credit (ITC) of GST paid to various supplies subject to the conditions.

Some of the goods and services on which ITC is available under GST to the players of the entertainment industries are as follows

Type of Goods Nature of Services Input Tax Credit of GST
Set Material 18%
Food supply on Sets 0%
Costumes 18%
Renting of Hotels/Locations 18%/28% (Depends)
Renting of Vehicle 0%
Renting of Equipment’s 18%
Artist Services 18%
Directors & Technician 18%
Extra Artist Agency 18%
Singers & Dancers 18%
Security Services 18%
Writers Services 18%



GST Tax Structure: Producer & distributors

Same state


Producers      >>>>     Transfer of Right of Movie   >>>>    Distributor Association

Cost of Movie    =100

SGST@9%          =09

CGST@9%          =09

Total Amount    =118

(SGST)State Govt =Paid Rs 09

(CGST) Central Govt =Paid Rs 09


Different states

                 State x                                                                                     State y

Producers      >>>>     Transfer of Right of Movie   >>>>    Distributor Association


Cost of Movie    =100

IGST@18%          =18

Total Amount    =118

(IGST) Central Govt =Paid Rs 18





GST Tax Structure: Distributors & Exhibitors / Owners

Same State


Distributor Incurs Expenses on Marketing & Promotions of movies i.e. 118+32 = Rs 150/- >>>>>>>> Exhibitors

Take the Theatre on Rent


Distributors will Sale Ticket to General Public & Pay the above taxes to

Concerned authority along with payment of rent to exhibitor

Cost of Ticket    =150

Service Charge = 07

SGST @ 14%      = 15.6

CGST @ 14%      =15.6

Total Collection =111.72/-


State Govt

Payable = 15.6

Less: ITC =09

Payment = 6.6


Central Govt

Payable = 15.6

Less: ITC =09

Payment = 6.6


Rent Paid         =1, 00,000

SGST @ 09%      = 9,000

CGST @ 09%      =9,000

Total Payment=1,18,000


State Govt Payment by Exhibitor=9000

Central Govt Payment by Exhibitor=9000


Same State

Distributor Incurs Expenses on Marketing & Promotions of movies i.e. 118+32 = Rs 150/- >>>>>>>> Exhibitors

Movies Sharing Agreement / Forming Association

Exhibitors will Sale of Ticket to General Public & Pay the above taxes to concerned authority & then share profit with Distributor


Cost of Ticket = 150

Service Charge = 07

SGST @14% = 15.6

CGST @14% = 15.6

Total Collection        =111.72


Distributor’s share    50% on total collection

Exhibitor share          50% on total collection

State Govt

Payable =15.6

Less: ITC =09

Payment = 6.6


Cebtral Govt

Payable =15.6

Less: ITC =09

Payment = 6.6


GST Tax Structure: Distributors & Exhibitors / Owners

Different State

Distributor Incurs Expenses on Marketing & Promotions of movies i.e. 118+32 = Rs 150/- >>>>>>>> Exhibitors


State X                                                                           State Y

Take the Theatre on Rent


Distributors will Sale Ticket to General Public & Pay the above taxes to

Concerned authority along with payment of rent to exhibitor


Cost of Ticket    =150

Service Charge = 07

IGST @ 28%      = 31.2

Total Collection =111.8/-



Centre Govt

Payable = 31.2

Less: ITC@ CGST =09

Less: ITC @ SGST=09

Payment = 13.2


Rent Paid 1,00,000

IGST @  18% 18000

Total Payment 1,18,000


Payable =18000

Central Govt



Different State


Distributor Incurs Exp on Marketing & Promotions of movies i.e. 120+30 = Rs 150/- >>>>>>Exhibitors



State X                                                                           State Y

Movies Sharing Agreement


Exhibitor will Sale of Ticket to General Public & Pay the above taxes to concerned authority & then share profit with Distributor


Cost of Ticket = 150

Service Charge = 07

IGST @28%    =31.2

Total Collection =111.8


Distributor’s share = 50% on Total Collection

Exhibitor share= 50% on Total Collection

Centre Govt

Payable = 31.2

Less: ITC@ CGST = 09

Less: ITC @ SGST =09

Payment = 13.2



25251020 Condenser Films Trimmed But Not Cut To Shape 5
37024310 Photographic Films (black And White) of a Width 620 18
37024410 Photographic Films Of A Width 120 Mm In Rolls 18
37061015 Children’s Films Certified By The Central Board Of Film Certification To Be “children’s Film” 18
37061020 Documentary Shorts And Films Certified As Such By The Central Board Of Film Certification 18
37061052 Children’s Film Certified By The Central Board Of Films Certification To Be “children’s Film” 18
37061070  Short Films Not Elsewhere Specified Or Included 18
37069015 Children’s Films Certified By The Central Board Of Film Certification To Be “children’s Film” 18
37069020 Documentary Shorts And Films Certified As Such By The Central Board Of Film Certification 18
37069052 Children’s Film Certified By The Central Board Of Films Certification To Be Children’s Film 18
68141010 Cut Mica Condenser Films Or Plates 28
85238040 Children’s Video Films 18



SAC Code


Licensing services for the right to broadcast and show original films, sound recordings, radio and television programme etc.
998554 Reservation services for event tickets, cinema halls, entertainment and recreational services and other reservation services



Theatre Owner >>>>>> Food Supply Agency (or) Parking Agency

Service of providing food/Parking facility can be possible by following two arrangements:

Theatre Owner

  1. Give the Premises on Rent and receive Rent Payment Periodically
  2. Rent receipt is not covered under any exemption Theatre Owner/Exhibitor and Food Supplier Agency will share the total collection as per the agreement between both of them. and thus 18% GST is applicable as per Residual Entry no: 36
  3. Thus the Service Provider (Theatre Owner/Exhibitor) will collect GST under NCM

Food Supply Agency or Parking agency


  1. Theatre Owner/Exhibitor and Food Supplier Agency will share the total collection as per the agreement between both of them.
  2. No GST is levied as such profit sharing is not covered under the Levy of GST.
  3. No GST is levied as such profit sharing is not covered under the Levy of GST.

Note: Thus it is beneficial to share the collection of the Food Supplier for NO TAX implementation



If the food supply counter or the Canteen is owned by the Theatre Owner/Exhibitor himself, thus the following will be the implementation of GST in such case:

Air Conditioner Counter: Food Supplier will collect GST @ 18% under Entry No: 22 of GST rate schedule from the customer and can claim Full Input Tax Credit for such service.

Non-Air Conditioner Counter: : Food Supplier will collect GST @ 12% under Entry No: 16 of GST rate schedule from the customer and can claim Full Input Tax Credit for such



The payment of salary to employees of the Exhibitor/Theatre Owner is not covered under GST as the employer-employee relationship is not the service and sale of Goods.

And thus will not attract any GST. Thus the salary payment will be governed by the Income Tax Act, 1961.


Selling of space for Advertisement in Print Media- i.e. In Newspaper and Books as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867 –    Liable for GST @5% as per Entry no:12 of GST RATE SCHEDULE

Advertisement by way of banners and boards at different places in or out of the theatre or in city – Liable for GST @ 18% as per Entry No: 18 of GST RATE SCHEDULE

Advertisement by way of promotion of Movie by the team members of the movie in the TV show’s or reality show or live shows in or out of the city—   Liable for GST @ 18% as per Entry No: 18 of GST RATE SCHEDULE


There were certain issues about the tax liability in respect certain transactions of the entertainment industry before and after the advent of GST, Some of them were as follows:-

  1. In case of certain lease of film / television content rights, there was a controversy as to whether the transactions were that of sale of goods or providing services. If the transactions were considered as that of sale of goods, VAT would be applicable, which was payable to State Government. If the transactions were treated that of services, Service Tax would have been applicable, which would have been payable to Central Government. Therefore, the transactions triggered turf war between the two Acts. As a result, in many cases, the transactions were made liable to VAT as well as Service Tax, thereby increasing the burden of taxes. ,
  2. Before GST regime, the tickets of films used to attract Entertainment Tax based on the State laws. There was no set off of the Entertainment Tax against Service Tax or VAT paid by the distributor and so the levies were cumulative. The ultimate customer used to bear the burden of taxes paid by the distributor as well as the Entertainment Tax paid by the theatre owner. With the introduction of GST, the entertainment tax levied by the State Government is abolished.

However, the tax can be levied by the municipality or local authorities as prescribed. Such tax is not entitled to get                          adjusted against GST paid and that can become an additional levy.

  1. The theatrical rights of films were not liable for VAT or Service Tax. Now with GST triggering in, sale or lease of all the rights will attract GST. To that extent, the burden on the industry will increase. The silver lining is, the producers as well as the distributors will be able to take full Input Tax Credit (ITC) on their input costs, which was not available in full. The level of credit will depend on the inputs of goods and services used by the producers and whether they are being acquired from the registered dealer. Certain costs which constitute a major element of cost for production of films and television content such as food, beverages, outdoor catering, vehicle hire etc. will not be entitled for ITC due to specific provisions.

In case of film distributors, they will be able to take benefit of ITC of GST paid by producers and similarly the theatre                    owners will be able to take ITC of GST paid by the distributors. The rate of tax payable by the ultimate customers of the                industry, being 28% on the tickets purchased, the ITC is likely to be fully absorbed.

  1. The reverse charge mechanism, as was applicable in Service Tax, is also applicable to GST. In such scenario, the recipient of service pays the tax instead of the supplier. the major change is that the reverse charge mechanism will also be applicable in respect of goods and services procured from persons who are not registered under GST.

GST will have to be paid by the registered person consuming the goods or services. In entertainment industry, large section of service providers and even suppliers are small suppliers or service providers. Purchases from them will attract GST in hands of the entity, who is registered and using the goods / services. Apart from paying the tax, the compliance level will be substantial due to preparation of invoices required to be done.

  1. GST paid under the reverse charge mechanism will be available as Input Tax Credit. Nevertheless, it is bound to increase the compliance cost as well as the basic cost of input. As the recipients of services have to take goods / services from suppliers in small locations, especially when they go for outdoor shooting, the compliance needs as well as cost may increase.
  2. One more important issue is that in case of a film producer or a television content producer, GST rate applicable for exploitation of films or television content is 12%. The major portion of input in a film or a TV serial is services given by artists, technicians and other persons and various rentals paid which attract 18% GST. So major inputs are received with 18% GST credit but the output is charged at 12% GST rate. In case of many films, which do not fair well or could not be exploited to the extent of breakeven level, Input Tax Credit of GST paid will remain unutilised and may have to be written off. Similarly in case of TV serials, which cannot be sold at remunerative price, ITC may remain unutilised. To that extent, the profitability of the industry may get hampered though a preferential GST rate of 12% has been notified.
  3. A major cause of concern for various amusement and entertainment parks is that the rate applicable to them has been notified at 28%.

It may not be appropriate to consider the entertainment parks, where generally a family goes for entertainment; with                    casinos, race courses, etc. Many of the entertainment parks also educate the visitors in respect of history, geography,                    science, vocation, etc. This rate is quite stiff

          Now these parks will attract higher rate of GST and the exemption granted by the State will get nullified.

  1. It has been a practice of many States to give exemption for regional films as well as films spreading positive messages to Society to give relief of entertainment tax or to grant exemption for a period. This power of the State will get abolished as GST will be levied and the State may not be able to tamper with to give relief to such films.
  2. The production of feature films and TV serials entails shooting for late hours and at various locations. It is a common practice in the industry to serve food and beverages to staff and others present, give outdoor catering services at various shooting locations and provide mode of conveyance. These expenses constitute substantial cost of production but GST paid on the same will not be allowed as ITC.
  3. Under GST regime, though the entertainment tax has been merged with GST, an authority is given to a Panchayat /Municipality /Regional council/ District councils to levy and collect taxes on entertainment and amusement. This appears to be a backdoor entry of entertainment tax.
  4. Place of supply of service may also cause some issue for the entertainment industry. In case of shows of entertainers, dramas, etc. and activities such as that of event management, which are provided at various locations from time-to-time and expenses are incurred for such performance at various locations outside the State of registration of the service provider, he may not be able to claim the benefit of ITC for GST paid on products and services consumed by him out of the State of his registration, unless he takes registration in such a State as a casual taxable person.
  5. Similarly, in case of outdoor shooting, which takes place outside the State of registration of the producer, he may not be able to take credit of GST incurred on certain purchases and services procured in that State, in the absence of registration in that State. In such a case, it may be advisable to appoint an intermediary in the form of line producer registered in that State for undertaking the credit of GST paid in the State, which can be transferred by him to the producer by billing to him.
  6. In case of online entertainment services such as digital streaming, online music and games; if the services are provided by a person located in non-taxable territory and services are to be received by consumers resident in India, there is an onerous duty casted on him. Such supplier is required to appoint a representative in India for registering and paying GST on the services rendered by him.
  7. Supplier of services by an author, music composer, photographer, artist or like by way of transfer or permitting the use of enjoyment of copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 have been now made subject to reverse charge by Notification dated 28th June, 2017.

GST appears to be a positive legislation for entertainment industry in general. The positive impact of the same hinges on              its smooth implementation and abstinence of further taxing by State Government and local authorities to increase the                  burden on business as well as consumers. Its success will also depend on fairness in implementation.





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Entrepreneurs, who were hesitant to start a business due to the complications involved in operations, can now rethink and establish SMEs considering the benefits that small firms receive under GST. Read more “Impact of GST on SME in India”

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Benefits of GST in India


Goods & Service Tax (GST) has been implemented in India since July 2017. Procedure for GST registration is centralised and standardised similarly to service tax registration.

Businesses no longer need to obtain multiple VAT registration. A single GST registration is applicable across India. The standardised registration procedure improves ease of starting a new business in India.

GST has enabled a transitional shift from a complicated, multi-layered indirect taxation system to a single unified indirect taxation system which offers India the much-needed trade boost.

Some of the benefits of GST in India are given below. Read more “Benefits of GST in India”

GST Registration And How To Register For GST

Who Needs GST Registration And How To Register For…


A taxable person, as per GST law, is a person who engages in economic activity such as trade and commerce and fulfils the criteria that require a person to obtain GST registration. The term ‘person’ refers to an individual, HUF, company, firm, LLP, AOP/BOI, corporation, the government company, body corporate incorporated under laws of a foreign country, co-operative society, local authority, government, trust or/and artificial juridical person.

Who needs GST registration? Read more “Who Needs GST Registration And How To Register For GST”