In a major relief to the PVR, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi Bench held that no Service tax under Online Information Database Access and Retrieval services (OIDAR) for mere receiving of code for getting a printout of the ticket from the cinema hall.
The appellant, PVR is engaged in the business of exhibition of movies through various cinema halls located all over India. The appellant sells tickets for movies from the cinema ticket windows and also through its website which is accessible through computer and mobiles phones. The website gives information on movies that are currently being exhibited in its cinemas, upcoming movies, trailers of movies, and similar information.
According to the appellant, no price is charged for accessing this website and any individual can access this website and gain information on movies that are being exhibited or would be exhibited in PVR cinemas. The customers who book tickets online through the website or through mobile phones electronically are required to pay an amount of INR 5/- to INR 25/- per ticket over and above the value of tickets. When the tickets are booked electronically, the hard copies of the same can either be collected over the counter or be retrieved by way of a printout from a machine kept outside the counter of the movie hall.
The appellant received a show-cause notice dated 14.06.2012 for the period 01.04.2007 to 31.12.2011 alleging that the „convenience fee‟ charged by the appellant on its customers for booking the tickets online through the website is exigible to service tax under „OIDAR‟ but the appellant did not deposit service tax. The show-cause notice also invoked the extended period of limitation and created a demand of Rs. 1,70,93,379/- with penalty and interest.
The department submitted that since a booking code is provided to a user when an online booking facility is availed and the user has gone to a movie hall to get a printout of the ticket, would mean that there is access/retrieval of information that cannot, therefore, be accepted. The code received in the process is purely incidental and cannot be said to be the main object of the transaction.
The coram headed by President Justice Dilip Gupta and Technical Member P.V.Subba Rao ruled that the essential characteristic of the arrangement under consideration in these appeals is availing the facility of online booking of tickets and not accessing/retrieving any data/information. Service tax under the category of OIDAR, therefore, cannot be levied upon a user merely because he receives a code for getting a printout of the ticket from the cinema hall.
“Convenience fee is not charged by the appellant for any access/retrieval of information or database. Service tax under OIDAR cannot, therefore, be levied upon the appellant for the period prior to 01.07.2012. The appellant has stated that it started discharging service tax on convenience fees under the negative list regime after July 1, 2012, under the category of “other taxable services,” the CESTAT observed.
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