No Liability Of Knight Riders To Pay Service Tax On Coaching Service Provided In Relation To Sports: CESTAT
Mariya Paliwala
8 July 2023 7:30 AM GMT
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Knight Riders are not liable to pay service tax on coaching services provided in relation to sports.The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that coaching in the field of sports has been specifically excluded from the applicability of service...
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Knight Riders are not liable to pay service tax on coaching services provided in relation to sports.
The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that coaching in the field of sports has been specifically excluded from the applicability of service tax under 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 a centre but by an individual coach and support staff, the service tax is not chargeable.
The assessee, M/s Knight Riders Sports Private Ltd., Mumbai, is 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 the Indian Premier League (IPL).
The Service Tax Department initiated the show-cause proceedings against the appellant-assessee, seeking confirmation of service tax demands.
The issue raised was whether 100% of payments by the company to foreign coaches and support staff are taxable under RCM as BSS on the basis that they carry out promotional activities. The promotional activities include wearing uniforms with logos, etc.
The CESTAT noted that the fees pertain to coaching the cricket players playing for the team and that 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 services are exempt.
The tribunal held that service tax demands on coaching services provided in relation to sports are not sustainable.
Case Title: M/s Knight Riders Sports Pvt Ltd. Versus Pr. Commissioner of Service Tax-IV
Case No.: Service Tax Appeal No. 86857 of 2015
Date: 26.06.2023
Counsel For Appellant: Nitin M Tagade
Counsel For Respondent: Sanjeev Nair
