Commissioner of Service Tax-IV Vs Sachin Tendulkar (CESTAT Mumbai)
The Central Excise Service Tax Appellate Tribunal (CESTAT), Mumbai, dismissed an appeal filed by the Revenue challenging an order that had largely dropped a service tax demand against a leading international cricketer. The cricketer, who played matches in the Indian Premier League (IPL) for a franchisee, was initially targeted by service tax authorities for allegedly providing a taxable service under the category of “business support service” (BSS). This demand was based on the premise that the player promoted the franchisee’s business by activities such as wearing the team logo on his apparel.
The initial Show Cause Notice (SCN), dated March 12, 2013, covered the period from 2008-09 to 2011-12, proposing to recover a service tax demand of Rs.1,23,81,346/-. However, the original adjudicating authority, the Commissioner of Service Tax, Mumbai-IV, passed an order on April 7, 2016, dropping the recovery of 90% of the proposed demand, while confirming a service tax demand of Rs.12,50,027/- along with interest. The Commissioner ruled that the players’ services were primarily for participation in matches, which could not be classified as a taxable service under BSS.
The Commissioner did hold that activities related to promotion or marketing, such as wearing the team logo, should be considered as provision of service under BSS. This was reasoned by citing the contractual norm that a player was entitled to retain 10% of the contracted amount even if he did not play in any of the matches. This 10% was deemed consideration for promotional activities.
