Knight Riders Sports Pvt Ltd Vs Pr. Commissioner of Service Tax-IV (CESTAT Mumbai)
CESTAT Mumbai held that coaching in the field of sports has been specifically excluded from the applicability of service tax vide the definition of ‘commercial training or coaching centre’ under section 65(27) of the Finance Act, 1994
Facts- M/s Knight Riders Sports Private Ltd., Mumbai (appellants-assessee) are incorporated as a Private Limited under the Companies Act, 1956. Appellants-assessee are operating a cricket team in the name and style of Kolkata Knight Riders (KKR) in the cricket tournament organised by the Board of Control for Cricket in India (BCCI). The tournament is popularly known as Indian Premier League (IPL).
During the disputed period, the Service Tax Department initiated the show-cause proceedings against the appellants-assessee, seeking confirmation of service tax demands on various issues. The matter arising out of the show cause notices were adjudicated by the learned Principal Commissioner of Service Tax, Mumbai-IV vide Order-in-Original (impugned order), wherein the service tax demands were confirmed along with interest and also penalties were imposed on the appellants.
Conclusion- In the case of M/s KPH Dream Cricket Pvt. Ltd. it was clearly held that the main activity of players, who were engaged under a contract by the appellants-assessee, is to play cricket apart from engagement of promotional activities which are ancillary to the main activity of playing cricket. On drawing support from various decisions held in favour of the appellants-assessee, the Tribunal held in this case that on player’s fee, no service tax is payable and upheld the decision of the Commissioner in rightly dropping the demand of service tax on player’s fees.
Held that coaching in the field of sports has been specifically excluded from the applicability of service tax vide the definition of ‘commercial training or coaching centre’ under section 65(27) of the Finance Act, 1994, and as the service of coaching is not provided by an centre but an individual coach and support staff, he concluded that the service tax is not chargeable on such activity. Further, in this case the fees pertains to coaching the cricket players playing for the team and the amount paid is attributable to the coaching service or support service provided by them and thus service tax cannot be demanded on these fees and services as in the case of cricket players, as sports coaching and support staff service are exempt.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Briefly stated, the facts of the case are that the M/s Knight Riders Sports Private Ltd., Mumbai (herein after referred to as ‘appellants-assessee’, for short) are incorporated as a Private Limited under the Companies Act, 1956. The appellants-assessee are operating a cricket team in the name and style of Kolkata Knight Riders (KKR) in the cricket tournament organised by the Board of Control for Cricket in India (BCCI). The tournament is popularly known as Indian Premier League (IPL). During the disputed period, the Service Tax Department initiated the show-cause proceedings against the appellants-assessee, seeking confirmation of service tax demands on various issues. The matter arising out of the show cause notices were adjudicated by the learned Principal Commissioner of Service Tax, Mumbai-IV vide Order-in-Original dated 24.06.2015 (for short, referred to as ‘impugned order’), wherein the service tax demands were confirmed along with interest and also penalties were imposed on the appellants. The gist of the demands confirmed in the impugned order are summarised herein below in the form of a table:-
