Commissioner of Service Tax Vs Nokia India Pvt. Ltd. (CESTAT Delhi)
The case centers on an appeal filed by the Revenue challenging the decision of the Commissioner to drop a demand for service tax on Nokia India Pvt. Ltd. for its sponsorship of the Kolkata Knight Riders, a team in the Indian Premier League (IPL). The Revenue believed that Nokia’s payment of ₹15 crores to the team for sponsorship rights should be taxed under the category of ‘sponsorship services’ as defined in the Finance Act, 2006. However, the adjudicating authority, referencing a similar case involving Hero Motocorp Ltd., ruled that the sponsorship of IPL, a sports event, is exempt from service tax under the exclusionary clause of section 65(105)(zzzn).
The Tribunal upheld the earlier ruling, finding that sponsorship of a sports event like IPL, which involves a commercial element, qualifies for immunity from service tax. This ruling is in line with previous decisions where sponsorship services for sports events were deemed exempt from tax under the relevant provisions. The Tribunal also noted that the Revenue’s appeal had already been dismissed by the Supreme Court in similar cases, reinforcing the applicability of the exemption. Consequently, the CESTAT dismissed the Revenue’s appeal, affirming the decision to drop the service tax demand on Nokia for its IPL sponsorship.
