The Supreme Court has declared that royalty shown in the invoice of a music or film recording imported for sale in India should be included while computing customs duty. In this batch of cases, the recording was of Indian artists and they were converted into digital audio tapes master and then sent abroad for replicating. The CDs were made abroad and brought in for sale. In such cases, duty will have to be charged on the value of the final product. When pre-recorded CDs are imported against blank cassettes, the value went up in the market and therefore royalty will have to be included in the transaction value. The court passed the order in the case of several music firms led by Sony and Living Media. The court set aside the rulings of the customs appellate tribunal which had taken the opposite view and on the appeals of the Commissioner of Customs.
Source : Business Standard
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