Order date – 22 December 2022 

Facts – 

• The Appellant, M/s Cinepolis India Pvt Ltd, involved in exhibition of cinematographic films, in an arrangement by which several distributors participate in sharing of revenue with the appellant.
• Tax liability for the period from 2014-15 to 2015-16 was ordered for recovery under section 73 of Finance Act, 1994, along with appropriate interest and penalty on the ground that these are distinct entities rendering service in de-mutualized capacity on ‘principal-to-principal’ basis and do not acquire status of partners in consequence of their agreement.

Issue –

• Whether the appellant is liable to pay tax on exhibition of cinematographic films?

Order –

• The Tribunal held that as per the circular dated 23.02.2009 issued by the Central Board of Excise and Customs, and relying on the decision of Reliance Mediaworks Limited it is clarified that screening of a movie is not a taxable service except where the distributor leases out the theater and the theater owner get a fixed rent.
• Also in a subsequent Circular dated 13.12.2011 issued by the Central Board of Excise and Customs whereas, in cases the character of a “person” is not acquired in the business transaction and the transaction is as on principal-to-principal basis, the tax is leviable on either of the constituent members based on the nature of the transaction and as per rules of classification of service as embodied under Sec 65A of Finance Act, 1994. 
• Hence no service tax can be levied on the appellant under BSS.