2019 (8) TMI 1693 - AT - Service Tax

Taxability - support services of business or commerce or not - players in the Indian Premier League (IPL) - HELD THAT - The decisions of Hon ble High Court of Calcutta in SOURAV GANGULY VERSUS UNION OF INDIA OTHERS 2016 (7) TMI 237 - CALCUTTA HIGH COURT which, inter alia, challenged the instruction in circular no. 42/Comm (ST)/2008 dated 26th July 2010 of Central Board of Excise Customs (CBEC) directing issue of notice on fees, either fully or partly, paid to players for participation in the Indian Premier League (IPL). Therein, it was held that The remuneration received by the petitioner from the IPL franchisee could not be taxed under business support service. Thus, the players, such as the appellant herein, do not render support services of business or commerce - appeal allowed - decided in favor of appellant.

Summary

Issues:
Taxability of players in the Indian Premier League (IPL) under section 73 of Finance Act, 1994 for providing 'support services of business or commerce' as per section 65(104c) and section 65(105)(zzzq).

Analysis:
The case involved a cricketer contracted to play for Mumbai Indians in the IPL, facing tax recovery proceedings under the Finance Act, 1994. The original authority confirmed a demand of &8377; 7,94,048 for two periods, with interest and penalty imposed. The first appellate authority upheld the demand but set aside the penalty invoking section 80. The appeal challenged the order-in-appeal of the Commissioner of Central Excise (Appeals), Pune-III.

The appellant's counsel argued citing precedents that players in the IPL were not taxable under 'support services of business or commerce.' The Authorized Representative contended that the appellant promoted the franchisee's business interest, lacked bifurcation of consideration, and couldn't exclude himself from the service category due to subsequent changes in the law.

The decision referred to the judgment of the Calcutta High Court in Sourav Ganguly v. Union of India, challenging a circular on fees paid to players. It highlighted that brand promotion was not taxable pre-July 2010, and the cricketer was under the franchisee's control, akin to an employee, not an independent worker providing business support services. Thus, the cricketer was not rendering such services, leading to the appeal's allowance based on Tribunal decisions.

In conclusion, the Tribunal set aside the impugned order, following precedents that players like the appellant did not provide 'support services of business or commerce,' ultimately allowing the appeal.