Service Tax
TRT-2025-
Cestat Chennai
Date:-23-06-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 23 June 2023
Parties: M/s. Vodafone Idea Limited Vs The Commissioner of Central Excise, Customs and Service Tax
Facts –
- The Appellants, M/s. Vodafone Idea Limited, were sponsoring events under the brand name ‘Vodafone’., The BCCI had executed an Agreement with the appellant for sponsoring the Indian Premier League Twenty-20 (IPL) and ICC Cricket World Cup.
- On a perusal of the books of accounts of the appellant, the Revenue noticed that the appellant had incurred an expenditure on sponsorship services during the period from 01.05.2006 to 31.03.2010 for which appropriate Service Tax was not paid by the appellant. Accordingly, a show cause notice was issued and which came to be adjudicated demanding Service Tax and imposing penalties
Issue –
- Whether the amount paid by the appellant towards sponsorship of cricket tournaments can be subjected to levy of Service Tax or not?
Order –
- The Tribunal observed that the issue is no longer res integra and is settled in favour of the appellant. In many decisions of the Tribunal, it has been held that no Service Tax is payable on sponsorship of IPL and ICC cricket tournaments during the impugned period.
- Further the decision in the case of M/s. Hero Motorcorp Limited v. Commissioner of Service Tax, Delhi [2013 (32) S.T.R. 371 (Tri. – Del.)], has been affirmed by the Hon’ble Supreme court and subsequently, followed by the Tribunal, Mumbai in M/s. Vodafone Cellular Ltd. v. Commissioner of Central Excise, Pune-III [2017 (51) S.T.R. 26 (Tri. – Mum.)] wherein it has been held that, for the period under dispute, no Service Tax demand on sponsorship of sports events can be fastened on the appellant.
- Hence it was held that the provisions made in the books of account by the appellant as per the GAAP towards sharing the expenditure on account of receipt of sponsorship services cannot be subjected to tax as the ingredients for levy of tax are not fulfilled in the absence of any provision of service and when payments were made only in relation to sponsorship of the IPL Cricket tournament.
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