Anushka Sharma spills the beans on her debut film, 'Rab Ne Bana Di Jodi' in docu-series, ‘The Romantics’

Swati Deshpande (THE TIMES OF INDIA; March 30, 2023)

Mumbai: Actor Anushka Sharma is the “first owner of copyrights” on her performances at events or in advertisements and is liable to pay value added tax on income she earns from it, according to the state government. Copyrights are taxable goods under the Maharashtra Value Added Tax (MVAT), the sales tax department told the Bombay High Court while seeking a dismissal of her petition against the levy.

The actor had challenged a March 2021 order to pay dues of 1.23 crore for assessment year 2012-13 under the MVAT Act. Sharma also challenged similar orders for three subsequent years. Her petition had argued that she has not sold the copyrights and hence sales tax cannot be levied on it.

The HC had sought the government’s reply. Tendered on Wednesday, the affidavit by David Alvares, joint commissioner of sales tax, Large Taxpayers Unit in Mumbai, said under the MVAT Act, “copyrights are intangible goods” and “hence taxable goods.”

Sharma provides her services and earns an income through a ‘contract for services’ and hence under section 17 of the Copyright Act she is its first owner, said the joint commissioner.

The definition of ‘sale’ under the Act included transfer of right to use goods, said the reply. Sharma’s rights under the Copyrights Act get transferred and are used by her clients for commercial purposes, for which she receives an income, it said. This is a sale under the MVAT Act, justifying demands made in the assessment order.

In case of films, the producer is the first owner of copyright, and hence income for acting in films is not taxed under MVAT Act, the affidavit filed through government lawyer Jyoti Chavan clarified.

Yash Raj Films is Sharma’s agent and through them, she entered into tripartite agreements with companies including Nivea India, Gitanjali Gems, Cannon India, Oranjuice Entertainment and is paid for “artistic performances” used by the clients for advertisements or entertainment, said the state. Such copyrights comprise a bundle of rights (sound recording or visual recording of performance, right to reproduction of performance, right to broadcast the performance, etc) as given under the Copyright Act 1957, it added.

The reply said her petition was not maintainable; it said the Act provides for an appellate body to hear her appeal against the order. The matter came up before a bench of Justices Nitin Jamdar and Abhay Ahuja. The HC adjourned the matter to Thursday after her lawyer sought time.
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MID-DAY (March 30, 2023)

Actor Anushka Sharma was the "first owner of copyrights" on her performances at awards functions or stage shows, and therefore liable to pay sales tax when she received income from them, the Sales Tax department has submitted before the Bombay High Court.

As she 'transferred' this copyright to the producers of such events for a fee, it was akin to a sale, it said.

The department on Wednesday filed its affidavits in response to four petitions filed by Sharma.

The Bollywood actor has moved the court challenging four orders passed by the deputy commissioner of Sales Tax demanding tax for assessment years between 2012 to 2016 under the Maharashtra Value Added Tax Act.

Sharma's contention is that an actor who performs in a film, advertisement or a stage/TV show cannot be called a creator or producer, and hence she or he does not own a copyright on the same.

In its reply affidavits submitted on Wednesday before a division bench of Justices Nitin Jamdar and Abhay Ahuja, the tax authority challenged this view. The bench said it will hear the matter on Thursday.

Anushka Sharma was a performer under the Copyright Act as a copyright is created in her every artistic performance, the Sales Tax department said.

"The petitioner is providing her services and earning income through contract for services and not through contract of services (that is, she is not employed by anybody). Therefore, under the Copyright Act, she is the first owner of the copyrights created in her artistic performance," it said.

Sharma receives income for her artistic performance from various client companies, and thus along with her artistic performance, the copyright on it also gets transferred to the client, the department said.

Under the MVAT Act, copyrights are intangible goods, therefore their transfer for a consideration is akin to a sale, it added.

"Her copyrights get transferred to the client company for commercial purposes and she receives valuable consideration. Hence it is covered under the definition of Sale under the MVAT Act," the affidavit said.

The affidavit filed by the Joint Commissioner of Sales Tax also said that the actor's petition should be dismissed with cost as she had an alternate remedy available under the MVAT Act.

"Under provisions of the MVAT Act, a hierarchy in appeals is provided for. Apart from appeals, there is also provision for review," it said.

Sharma cannot directly approach the high court with a writ petition, the affidavit said.

The high court interferes only when there is an infringement of fundamental rights, it added.

According to Sharma's petitions, during the concerned period she performed in films and at award ceremonies as part of a tri-party agreement with her agent, Yashraj Films Pvt Ltd and producers/event organizers.

The assessing officer levied sales tax not on film consideration but on product endorsements and anchoring at award functions, holding that Sharma had transferred her performer's rights, her petitions said.

For Assessment Year 2012-13, the sales tax demand, inclusive of interest, was Rs 1.2 crore on Rs 12.3 crore consideration and for 2013-14, it was Rs 1.6 crore on a consideration of Rs. 17 crore. The sales tax department passed the orders between 2021 and 2022.

The actor also said there was no provision to file an appeal before the appellate authority unless 10 per cent of the disputed tax is paid.

The assessing officer had erroneously held that by endorsing products and remaining present at award functions, she had acquired copyrights and sold/transferred the same, the petitions said.

Sharma is known for her roles in films like "PK", "Rab Ne Bana Di Jodi", "Sultan" and "Zero", among others.