Mysore Race Club Ltd. Vs Commissioner of Central Excise (CESTAT Bangalore)
CESTAT Sets Aside Club Service Tax Demand Because Services to Members Are Not Taxable; Bookmakers’ Stall Fees Not Treated as Renting of Immovable Property by CESTAT; Restaurant Service Tax Upheld Because Parliament Can Tax Service Component of Club Facilities; Sponsorship of Sports Events Liable to Service Tax Under Reverse Charge, Holds CESTAT.
In , the appeal before the Customs, Excise and Service Tax Appellate Tribunal challenged an Order-in-Original dated 24.06.2014 passed by the Commissioner of Central Excise, Customs and Service Tax, Mysore. The dispute concerned service tax liability under the categories of Commercial Use or Exploitation of Event, Renting of Immovable Property, Club or Association, Restaurant Services, and Sponsorship Services for the period from 01.04.2008 to 30.06.2012.
The Tribunal first examined the demand under “Club or Association” services. Relying on the judgment of the Supreme Court of India in State of West Bengal vs. Calcutta Club Limited, it held that services rendered by a club to its own members could not be treated as taxable services rendered for consideration. Accordingly, the demand under this category was set aside.
On the issue of “Commercial Use or Exploitation of Event” services, the Tribunal noted that the appellant transmitted horse racing events to other race clubs and received downlinking charges and revenue shares for permitting live telecast of races organised at its premises. The appellant argued that the receipts represented betting revenue, which was already subject to state betting tax, and that the arrangement among race clubs under the Turf Authorities of India was a reciprocal revenue-sharing arrangement rather than a commercial service transaction. The appellant also relied on departmental circulars relating to revenue sharing arrangements.
