Bombay High Court Quashes ₹79.7 Crore GST Demand on Karan Johar's Firms

The Bombay High Court has set aside a GST demand exceeding ₹79.7 crore against filmmaker Karan Johar's production companies, holding that cinematographic films do not constitute information technology software under GST law.

A bench comprising Justices M S Karnik and Sandesh Patil delivered the judgment on September 10 in a petition filed by Dharma Productions and Dharmatic Entertainment. The court emphasised that the mode of delivery—whether physical through hard disks or digital transmission—remains irrelevant to determining tax classification.

The judges noted that a cinematographic film, being a passive audio-visual work incapable of execution, manipulation, or interactivity, could not satisfy the statutory definition of IT software. "There is nothing on record to show how a cinematographic film could ever satisfy the statutory definition of 'information technology software'," the bench observed.

The High Court further clarified that there existed no statutory basis to equate digital content with software. The dispute centred on the classification of copyright works supplied by the production companies, with tax authorities having sought to impose GST at higher rates by classifying film content as software.

The judgment provides significant clarity for the entertainment and digital content industry in India regarding GST classification of cinematographic works, irrespective of their distribution channels.