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Microlesson · 5-min read

RCM - Copyright Transfer by Author/Music Composer/Artist/Photographer

## RCM on Copyright Services

### Coverage

Services supplied by:

  • Music composer, photographer, artist, or the like, by way of transfer or permitting use/enjoyment of copyright relating to original musical/artistic works → To music company / producer / publisherRCM
  • Author transferring copyright in literary works → To publisherRCM

Recipient (music company / publisher / producer) is liable to pay GST under RCM.

### Author's Option for FCM

An author has the option to pay tax under FCM instead of RCM, subject to ALL of these conditions:

1. Author must be registered under GST.

2. Author shall make a declaration to opt for FCM in prescribed form.

3. Once opted, author cannot withdraw the option for at least 1 year.

4. Author must make the declaration on each invoice issued to the publisher.

Note: This FCM option is available only to authors (literary works), not to music composers, artists, or photographers.

### Quick Reference

Service ProviderDefault MechanismOptional FCM?
Author (literary works)RCMYes (with conditions)
Music ComposerRCMNo
PhotographerRCMNo
ArtistRCMNo

Worked example

### Example 1

Example: Mr. Rahgir wrote a book and sold its copyright to Rupa Publications for ₹ 10 lacs. He also composed a song and sold its rights to T-series Music Company for ₹ 20 lacs.

Analysis:

  • ₹ 10 lacs (book to Rupa) → RCM by Rupa Publications if Rahgir has NOT opted for FCM. If opted (with all conditions), FCM by Rahgir.
  • ₹ 20 lacs (song to T-series) → RCM by T-series only. No FCM option available for music composers.

⚠️ Common exam mistakes

  • Extending the FCM option to music composers or photographers - the option is exclusive to authors
  • Allowing the author to withdraw FCM option within 1 year - the lock-in is mandatory
  • Forgetting the requirement to declare FCM option on the invoice itself
Bare-Act text Entry 9 of Notification 13/2017-CT(R) · Notification No. 13/2017-CT(R) dated 28.06.2017 · click to expand
Supply of services by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under section 13(1)(a) of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like - tax shall be paid on reverse charge basis. Provided that nothing contained in this entry shall apply where, an author opts to pay tax under forward charge subject to conditions.
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