# Film is not software even if delivered digitally: Bombay HC 2026-09-21T00:47:00+00:00 | Governance | Indian Opinion Desk Corroboration: 3 independent outlets The Bombay High Court has ruled that a cinematographic film is not information technology software under GST law, regardless of whether it is delivered via a digital link or hard disk. The court set aside a tax demand of over Rs 79.7 crore levied on Dharma Productions and Dharmatic Entertainment for the period between FY 2017-18 and FY 2020-21. Tax authorities had argued that delivering film content through digital links or hard disks brought the transaction under IT software services, attracting an 18% GST rate. Dharma Productions countered that licensing film rights fell under a lower 12% GST rate. The bench rejected the revenue department's position, stating that a passive audio-visual work cannot satisfy the statutory definition of information technology software. The court emphasized that the mode of delivery is irrelevant to tax classification, which must turn on the essential character of the supply. It quashed the assessment and appellate orders, finding a foundational jurisdictional error in the tax authorities' approach. ## Indian Opinion Analysis Barandbench and Medianama report the Bombay High Court's ruling as a clear legal rejection of the tax department's expansive definition of software. Times of India focuses on separate GST profiteering orders against two Hyderabad cinemas for not passing on a tax cut to moviegoers. The court ruling clarifies that digital delivery does not transform film licensing into a software service. The next watchpoint is whether the GST department appeals this decision to the Supreme Court. ## Coverage - barandbench.com (neutral report) Straight reporting of the court order and arguments - timesofindia.indiatimes.com (neutral report) Neutral reporting of tribunal orders on a different case - medianama.com (neutral report) Detailed neutral reporting of the court order and state arguments Tags: Bombay High Court, Dharma Productions, GST, Ministry of Finance Canonical: https://indianopinion.org/bombay-high-court-quashes-rs-79-7-crore-gst-demand-on-dharma-productions/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/bombay-high-court-quashes-rs-79-7-crore-gst-demand-on-dharma-productions/#story-in-brief