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Sum received for Line production services for shooting of ‘Fear Factor’ in SA not FTS or Royalty

October 12, 2018[2018] 98 taxmann.com 227 (Mumbai - Trib.)
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IT : Where Endemol India, commissioned to produce television series, viz., 'Fear Factor', based on US version/format of same for broadcast in India for shooting Episodes in South Africa, had vide agreement hired assessee (Endemol South Africa engaged in business of developing and producing entertainment serials for audio-visual platform) for carrying out Line Production Services in South Africa on work-for-hire basis, since various coordination/facilitation services rendered by assessee, viz., arranging for locational crew, producer, transportation, paper work for various stunts to be performed and other requirements for setting up and filming series, etc, were in nature of Line Production Services, same cannot be termed as technical, managerial or consultancy services. Thus, consideration received by assessee for rendering aforesaid services, which are purely administrative in nature, cannot be brought within sweep of definition of 'FTS' within meaning of Explanation 2 to section 9(1)(vii) or article 12 of India-South Africa tax treaty

• Further, since work (that is television series) was commissioned by Endemol India under contract of service, Endemol India would be first owner of work produced by assessee, and owner of copyright, as term 'royalty' under Article 12 of India-South Africa Tax Treaty, takes within its sweep only consideration received for use or right to use, any copyright, consideration received by assessee was beyond sweep of term 'royalty' as defined in Article 12.

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