Commissioner of Service Tax Vs Bigtree Entertainment Private Limited (CESTAT Mumbai)
CESTAT Mumbai adjudicated an appeal filed by the Revenue challenging the order of the Commissioner of Service Tax-VI, Mumbai, which had dropped the show-cause proceedings against Bigtree Entertainment Private Limited for the period from April 2010 to March 2014. The appellant argued that the respondent, operating the online ticketing platform BookMyShow, was effectively trading cinema and event tickets, an exempt activity, and thus any input service credit (CENVAT) claimed should be reversed under Rule 6(3) of the CENVAT Credit Rules, 2004. The Revenue contended that the respondent retained the proceeds of ticket sales temporarily before remitting to cinema/event owners, creating an additional commercial activity, and that the impugned order did not examine commission and other financial structures.
The respondent maintained that it merely provided a platform for ticket booking and acted strictly as an agent of cinema and event organisers. It did not set ticket prices, control inventory, or grant access to the events. Payments collected for base ticket prices were remitted in full to the principal, while only the convenience fee and commissions earned on events were retained and subjected to service tax. Legal counsel emphasized that the respondent did not provide any exempt services nor engage in trading, and that CENVAT credit was claimed only on taxable services. Judicial precedents, including Network Advertising Pvt. Ltd. vs. Commissioner of Service Tax and other Supreme Court rulings, were cited in support of the position that amounts collected on behalf of principals are not revenue for the service provider and do not require reversal of CENVAT credit.
