Stadium Provided By Tamil Nadu Cricket Association For IPL Matches, Not Taxable As ‘Infrastructural Support Service’ To BCCI: CESTAT

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the Chepauk Stadium provided by the Tamil Nadu Cricket Association for conduct of the Indian Premier League (IPL) matches, does not attract service tax. The Tribunal dismissed the Revenue Department’s contention that the same was in the nature of infrastructural support service provided to the Board of Control for Cricket in India (BCCI), which fell within the definition of ‘Support Services of Business or Commerce’ under Section 65(104c) of the Finance Act, 1994. The bench of Sulekha Beevi C.S. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) noted that sports organizations, like the BCCI and its State Associations, are not business or commercial organizations and thus, the conduct of sports or sporting events is not an assertion of their commercial rights. The CESTAT also remarked that Revenue Department had failed to show that there was an understanding between the Tamil Nadu Cricket Association and the BCCI for rendering the said service, i.e., providing the Chepauk Stadium for conduct of IPL matches, for a consideration of Rs. 10 Crore. The appellant, M/s. Tamil Nadu Cricket Association, received a sum of Rs. 10 Crore from BCCI. The Revenue Department opined that the said sum was received for providing the Chepauk Stadium and for assisting in the conduct of the IPL matches. Holding that the services rendered by the appellant were infrastructural support services falling under ‘Support Services of Business or Commerce’, the department issued show cause notices on the appellant, proposing to demand Service Tax along with interest and penalties. The same was followed by orders which confirmed the demand along with interest and penalties. The appellant, Tamil Nadu Cricket Association, challenged the orders before the CESTAT. The Tamil Nadu Cricket Association submitted before the Tribunal that it is a non-profit society which is affiliated to the BCCI, which is also a non-profit society established to promote and control the game of cricket in India. It added that the surplus income generated by BCCI from conduct of IPL matches, is distributed as IPL subvention money to its member associations, i.e., the State Associations of Cricket, like the appellant. It pleaded that the name subvention itself signifies that the said amount is given by BCCI to its member State Associations as grant / assistance, to promote the object of developing the game of cricket. The appellant argued that the said amount of Rs. 10 Crore was not received from BCCI as a consideration for promoting the matches to be played in the Chepauk Stadium, and that it was only a financial support to the appellant as an affiliate of BCCI. Referring to the relevant provisions of the Finance Act, 1994, the revenue department averred that the activity of providing the Stadium for conduct of IPL cricket matches falls within the definition of “taxable service” and therefore, the demand for service tax is legal and proper. As per Section 65(104c) of the Finance Act, “Support services of business or commerce” means services provided in relation to business or commerce, which includes infrastructural support services. As per Section 65(105)(zzzq) of the Finance Act, “taxable service” is defined as any service provided or to be provided, to any person by any other person in relation to support services of business or commerce. Referring to the facts of the case, the CESTAT noted that the appellant had provided the Stadium to Chennai Super Kings and had received Rs.50,00,000/- per match, for which they have discharged Service Tax. The Tribunal further observed that the Revenue Department has failed to produce any evidence to show that there was an understanding between the appellant and the BCCI for rendering the said service, i.e., providing the Chepauk Stadium for conduct of IPL cricket matches, for a consideration of Rs. 10 Crore. Perusing the definition of ‘Support Services of Business or Commerce’, the CESTAT concluded that unless there is a service provided and a consideration has been received for the said service, there cannot be a levy of Service Tax. “We have to say that the Department has failed to furnish the necessary facts to establish that the Stadium was given to the BCCI for the conduct of the matches and also to establish that the sum of Rs.10,00,00,000/- was a consideration received for providing the said Stadium,” the bench said. The Tribunal further reckoned that in the case of Commissioner of Central Excise, Jaipur-I vs. M/s. Rajasthan Cricket Association (2018), CESTAT Delhi was dealing with the Service Tax demand raised in respect of the amount received by the Rajasthan Cricket Association from BCCI. The Tribunal had upheld the findings of the Original Authority that Service Tax cannot be demanded under the ...

Stadium Provided By Tamil Nadu Cricket Association For IPL Matches, Not Taxable As ‘Infrastructural Support Service’ To BCCI: CESTAT

Parina Katyal

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