• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Is a publishing house required to pay service tax on payment of royalty to another publishing house for publishing excerpts of a book?

Payment of royalty arises only when there is assignment of any right or intangible asset (copyright in this case) or against seeking permission to use or reproduce a copyright material. Service tax is applicable on intellectual property right (IPR) services under Section 65(55a) of Finance Act, 1994, and IPR does not include copyright.

The term copyright means the exclusive right to do or authorise the doing of any specified act in respect of a work or any substantial part thereof (could be literary, dramatic on musical work; computer programme, artistic work, sound recording or film). Thus, it is not a taxable service under intellectual property services.

Going by Section 65A on classification of taxable services, it would also not fall under business auxiliary service or support service for business or commerce.

Coaching centre

One of my assessees has started ABACUS classes. The classes are for improving mental ability of students by using certain tools. Generally, the students are in the age group 4-15. Classes are carried on few weekdays.

These classes help students carry out mathematical calculations without using calculators. Course content is designed by the institute and this is in no way connected to the regular school material.

Do such classes fall under any exemption or are they liable to service tax?

Sudhir Gupta, Delhi

I feel that ABACUS classes will not fall under recreational classes, as the former are an exercise in skill upgradation or aptitude development.

It cannot also be called vocational coaching. Recreational activities should be like those given in Notification No. 19/2005-ST dated June 7, 2005.

According to the Notification, recreational training institute means a commercial training or coaching centre which provides training or coaching relating to recreational activities such as dance, singing, martial arts or hobbies.

Send in your queries to MentorAtYourService@gmail.com

http://MentorQA.blogspot.com

Sanjiv Agarwal

More Stories on : Taxation | At Your Service | Newspapers & Publishing | IPR | Education

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Should India sign FTA with China?

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line