Bombay HC on GST Classification for Cinematographic IPR Rights
Judgment dated 10.9.2026 of the High Court of Bombay in Writ Petition No.2029 of 2025 of Dharma Productions Pvt Ltd Vs. The State of Maharashtra and others with connected writ petition.
Being the producer, the petitioner owns the Intellectual Property Rights (“IPRs”, for short), including copyrights in the cinematographic films it produces and is the original owner of the copyrights. These copyrights cover the script, dialogues, musical works, sound recordings and the overall film as a whole. These copyrights, being intangible movable property and of incorporeal property, are recognised as ‘goods’ under the CGST Act and are capable of being transferred, assigned or licensed.
The petitioner enters into a Rights License Agreement with distributors for licensing of IPR in respect of cinematographic films for commercial exploitation to distribute, exhibit or exploit the theatrical rights. The IPR in respect of cinematographic films includes a bundle of rights such as theatrical rights, sound rights, satellite rights, digital rights etc. The licensee of the IPR is entitled to exploit the rights licensed by the petitioner as per the specific terms and conditions of the Rights License Agreement.
A cinematographic film delivered in a digital format, whether through a secure link or on a hard drive, is a “representation of data, sound or image recorded in a machine readable form”. This squarely falls within the definition of “information technology software” as contemplated under the relevant notifications.
he impugned orders do not deal with the definition of “Information Technology Service” at all. There is no finding, much less a finding, as to how a cinematographic film, a passive audio visual work, incapable of execution, manipulation or inter-activity could ever satisfy the statutory definition “information technology software”. The scheme of Classification of Services confirms the distinction.
The next aspect that we are required to consider is whether mode of delivery is irrelevant to classification. In our opinion, whether content is transmitted physically (encrypted hard disks) or electronically, the mode of delivery cannot determine classification, which must turn on the essential character of the supply. Equating “digital content” with “software”, the core error underlying the impugned orders, has no statutory basis.
