The revenue department today clarified that service tax on subscription fees collected by broadcasters from multisystem operators (MSOs) and cable TV operators for permitting the right to receive signals would be applicable only from June 2005 and not with retrospective effect from 2001.
The clarification has been issued following a contention that the amount collected from the MSOs and cable TV operators by the broadcasters as subscription fees for allowing access to paid channels is also leviable to service tax from July 2001.
The definition had been amended to include permitting the rights to receive any form of communication like signs, signals, writing, pictures, images and sound of all kinds by transmission of electromagnetic waves through cables to cable operators including MSO or any person through direct-to-home signals or by other means.
Service tax was imposed on broadcasting services with effect from July 2001.
The revenue department had issued a post-Budget circular in 2001 stating that for broadcasting services, advertisement or sponsorship charges received by a broadcasting agency or organisation would be the consideration for services rendered, and service tax would be payable only on these charges.