Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2014 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (5) TMI 839 - AT - Service TaxDemand of service tax - Business Support services - Consideration received for playing match - In the contracts between the IPL on the one hand and ISPL and ESPL on the other hand, the applicant had certain obligation to promote the brand name of ISPL/IPL and ESPL/ICL. However no separate payment made for promoting the brand name of the leagues and its franchisees - Held that - Prima facie, it appears that the service tax demand is on the entire consideration received by the player which includes consideration for match fee for playing cricket. Nothing has been specifically brought on record to say that he has actually received consideration endorsement/advertisement/marketing of any goods as part of the contractual agreement though such clauses are seen in the agreement. We further note that Business Support Service by definition is not very explicit and some amount of haziness exists in the scope of the entry. In such a situation, when the activity gets covered by another entry for taxing the activity subsequently the Tribunal has held that for the period prior to enactment of the new entry the service was not taxable. By this logic, it appears that consideration received by the applicant was not towards, Business Support Service . Prima facie, we feel that the applicant has made out a case for waiver of pre-deposit for admission of appeal - Stay granted.
Issues:
Tax liability on consideration received by a cricket player for playing in Indian Premier League (IPL) and Indian Cricket League (ICL) teams prior to the introduction of a separate entry for brand promotion in the Finance Act, 1994. Analysis: 1. Tax Liability Interpretation: The judgment revolves around the tax liability of a cricket player for consideration received for playing in IPL and ICL teams. The applicant had agreements with franchisees of these leagues, involving obligations to promote their brand names. The Revenue contended that the service rendered by the player prior to 01.07.2010 was classifiable under 'Business Support Service' and thus subject to service tax. A Show Cause Notice was issued for the payment received during certain years, resulting in a confirmed tax amount against the applicant. 2. Applicant's Argument: The applicant sought a waiver of tax, interest, and penalty, arguing that he was not promoting any specific brand or engaging in business activities to promote sales. The Counsel highlighted that the definition of 'Business Support Service' did not explicitly cover the player's activities, and the introduction of a new entry for 'Brand Promotion' indicated that prior activities were not taxable. Citing relevant case law, the applicant made a case for waiver based on the Tribunal's decisions in similar matters. 3. Revenue's Position: The Revenue opposed the waiver, asserting that the player not only played cricket but also promoted the business of the leagues and other entities through endorsements, advertisements, and marketing activities. Revenue-sharing agreements were mentioned, and since no separate figures were provided for endorsements, the demand was made on the entire amount received by the player. 4. Tribunal's Decision: After considering both sides, the Tribunal found that the service tax demand was on the entire consideration received by the player, including match fees. However, it noted the lack of specific evidence regarding consideration for endorsements. The Tribunal acknowledged the ambiguity in the definition of 'Business Support Service' and the subsequent introduction of a separate entry for brand promotion. Following the precedent set by previous decisions, the Tribunal granted a waiver of pre-deposit for the entire tax amount and stayed the collection of dues pending appeal, indicating that the consideration received by the applicant was not towards 'Business Support Service'. In conclusion, the judgment clarifies the tax liability of a cricket player for activities related to playing in IPL and ICL teams, emphasizing the importance of specific evidence and the interpretation of relevant service tax categories.
|