CESTAT Chennai: TV Serial Production for Broadcaster Taxable as “Programme Producer Service” Despite Perpetual Copyright Assignment

April 2, 2026 : The Customs, Excise and Service Tax Appellate Tribunal, Chennai Bench, has held that production of a television serial on behalf of a broadcaster constitutes a taxable service under “programme producer’s service”, even where the agreement provides for perpetual assignment of copyright.

In Sathya Jyothi Films v. Commissioner of GST & Central Excise (Service Tax Appeal No. 42361 of 2015), the Tribunal dismissed the appeal filed by Sathya Jyothi Films and upheld the demand of service tax along with interest and penalties.

The case arose from a copyright assignment agreement between the appellant and Gemini TV for the Tamil serial “Anandam”, under which exclusive rights of the dubbed Telugu version were assigned to the broadcaster in perpetuity. At the same time, the agreement required the appellant to undertake production of the serial under the direction of Gemini TV, with consideration fixed at ₹10,000 per episode, payable after telecast in batches.

The Department treated the arrangement as provision of programme producer’s service under Section 65(105)(zzu) of the Finance Act, 1994 and raised a demand of ₹7.85 lakh for the period 2005–06 to 2007–08 by invoking the extended limitation period. The appellant argued that the transaction amounted to permanent assignment of copyright, which constituted a sale rather than a service, and contended that only temporary transfer of copyright could be taxable. It also challenged the invocation of the extended period.

After examining the agreement, the Bench comprising M. Ajit Kumar (Technical Member) and Ajayan T.V. (Judicial Member) found that the arrangement clearly involved production of the serial on behalf of the broadcaster. The Tribunal noted that clauses relating to production under the broadcaster’s direction, delivery of episodes prior to telecast, per-episode consideration, and the right of the broadcaster to reject content demonstrated a service relationship. It held that the per-episode payment was directly linked to production activity and constituted consideration for services rendered.

The Tribunal further held that the agreement contained two distinct elements—assignment of copyright and provision of production services—and that the existence of a perpetual copyright transfer did not negate the taxable service component. Emphasising that service tax is levied on the activity undertaken, the Bench observed that production work carried out on behalf of a broadcaster remains independently taxable even if accompanied by transfer of rights.

On limitation, the Tribunal upheld the extended period, noting that the appellant had started paying service tax only from 01.04.2008 despite no change in the agreement or business model. It also found that the appellant had not disclosed the relevant income in ST-3 returns for the earlier period, amounting to suppression of facts.

In view of these findings, the Tribunal upheld the demand of service tax along with interest and penalties and dismissed the appeal.