Pradeep Thakur | TNN (THE TIMES OF INDIA; July 1, 2012)

 

New Delhi: All Bollywood actors and those performing in television serials will be charged 12% service tax from July 1, 2012, on their earnings from acting assignments and through endorsements. This would be in addition to their income tax obligation.

The government has from July 1, 2012, embraced new taxation of services by introducing a negative list. Any service out of this list or those in the exempted list of services will be charged service tax. But if an individual or a firm has an annual income of less than Rs 10 lakh, the service provider can avail exemption. The government has kept 38 services in the negative list which includes transport of goods or passengers, metered taxis, auto rickshaws, electricity transmission or distribution by discoms, betting, gambling, lottery, entry to amusement parks, burial services etc.

All private constructions activities will be levied service tax, including construction of private hospitals and educational institutions. Only government hospitals and educational institutions and government buildings are exempted from this levy. While performing artistes in folk or classical art forms of music, dance, or theatre have been kept out of this levy, activities of artists in still art forms, like painting, and sculpture, are taxable.

Services provided by an artist as brand ambassador is also taxable. Those in the exempted list include people having copyright relating to original work of composing song. Similarly, an author having copyright of his book will not have to pay service tax on royalty amount received from the publisher. A person having the copyright of a cinematographic film would also not be required to pay the levy.