The Film Production Company Wunderbar Films has filed a writ petition in the Madras High Court challenging the show cause notice issued by the Directorate General of GST Intelligence for demanding a Service Tax to the tune of Rs 2.59 crore from the production house.
The Wunderbar Films Pvt. Ltd. is a film production and distribution company established by actor Dhanush and his wife Aishwarya on 20 May 2010.
As per The Hindu report, the department had issued the show cause notice on August 11, 2017, for demanding service tax against the copyright along with a proposed penalty for the assessment year 2013–14 and 2014–15.
Justice M. Duraiswamy has issued notices returnable by three weeks to the Principal Additional Director General in the office of the Directorate General, Chennai zonal unit as well as the Principal Commissioner of CGST and Central Excise.
Mr.S.Vinod Kumar the director of the Wunderbar Films claimed that Service Tax could be demanded only if the copyright holder had transferred the rights temporarily for a fixed tenure and not perpetually. He also contended individual rights such as satellite rights, dubbing rights and remaking rights could be transferred to different individuals.
In the writ petition, the petitioner also contended that the permanent transfer of copyright had also been brought under the ambit of Goods and Services Tax (GST) only from July 1, 2017, the petitioner firm said the demand made from it pertained to the financial years 2013-14 and 2014-15 when only temporary transfer of copyright had been subjected to payment of service tax.
