2024 (4) TMI 787 - AT - Service Tax

Levy of service tax - business support service - making facility to the customers to book online tickets of movies and other shows - HELD THAT - As per the agreement, card companies were required to reimburse the appellant all the amounts that were being offered by the card companies to their customers through the ticket booking platform. Appellant had entered into agreements with cinema houses for payment of tickets booked through their platform. For booking of tickets through their platform, appellant collected convenience fee and paid service tax on the same. As per the record, appellant has not retained any amount to itself which was received from card companies and which was intended to be paid to cinema houses. The allegation in the proceedings are that the appellant had provided business support service to card companies. It was admitted in the show cause notice that the appellant was not raising any invoice to the card companies. It is very simple in the accounting standards that unless invoice is raised consideration is not collected. Therefore, it is very clear from the record that the appellant was not receiving any consideration from card companies. By relying on the ruling by Hon ble Supreme Court in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S EDELWEISS FINANCIAL SERVICES LTD. 2023 (4) TMI 170 - SC ORDER , it is held that the appellant was not providing any service to card companies and, therefore, the impugned order set aside. The appeal is allowed.

Summary

Issues involved: Service tax liability on collection of convenience fee from card companies for promoting their business.

The appellant was providing an online ticketing platform for booking tickets for movies and events, collecting convenience fees, and paying service tax on the collected fees. The Revenue alleged that the appellant was providing business support services to card companies by allowing discounts or free tickets to customers using certain credit cards. The appellant collected amounts from card companies through debit notes for the discounts offered. The Revenue demanded service tax on the collected amounts, leading to a dispute. The appellant contended that they did not retain any amount from the discounts and the consideration was nil, hence no service tax should be levied.

The main issue in this case was whether the appellant was providing business support services to card companies and liable to pay service tax on the collected amounts.

The appellant argued that they were not providing any service to card companies as they did not retain any amount from the discounts offered by the card companies to customers. They emphasized that no consideration was received from the card companies, citing a previous ruling by the Hon'ble Supreme Court in a similar case.

The Revenue supported the original order confirming the service tax demand on the basis that the appellant was providing business support services to card companies.

The Tribunal examined the contentions of both parties and the terms of the agreements between the appellant, card companies, and cinema houses. It was noted that the appellant did not raise any invoice against the services rendered to card companies and did not retain any amount intended to be paid to cinema houses. The Tribunal concluded that since no consideration was received from the card companies, the appellant was not providing any service to them. Relying on the precedent set by the Hon'ble Supreme Court, the Tribunal set aside the impugned order and allowed the appeal.