Understanding the Anushka Sharma Sales Tax Case

Anushka Sharma, a renowned performer, and actor challenged the sales tax imposed on her under the Maharashtra Value Added Tax (MVAT) Act. She petitioned the Bombay High Court, arguing that the tax authorities had mistakenly concluded that she had acquired "copyright" through her endorsements and subsequently sold or transferred it.

Sharma contended that her rights as a performer, as stipulated under Sections 38 and 38A of the Copyright Act, were being overlooked. She maintained that she qualifies as a "performer" as per the legal definition.

What Exactly is Sales Tax?

• Sales tax is an indirect tax levied on the sale of goods by individuals or businesses. It has been replaced by the Goods and Services Tax (GST) .
• In contrast, income tax is a direct tax imposed on earned income.
• Legally, sales tax can only be collected if there is solid proof of a sale transaction.

Read more about the Indian Taxation System.

What Constitutes Performer’s Rights?

• Section 38 of the Copyright Act of 1957, as amended in 2012, recognizes "Performer’s Rights."
• These rights cover any performance, whether it's a song, film, or literary work, as long as it has been in the public domain for 50 years.
• Performer’s rights cannot be bought or sold through a contract. This provision prevents production companies from exploiting artists by purchasing their work outright.

Bombay High Court's Verdict

• The Bombay High Court declined to discuss the merits of the case as the Maharashtra Value Added Tax Act provides a well-defined procedure for disputing the assessment.
• The tax authorities dismissed Sharma's plea as she had a legitimate alternative remedy available.
• As per the law, the actor needs to deposit 10% of the assessed tax before her appeal can be heard. If the High Court had intervened, she could have circumvented this requirement.