While allowing relief to former Rajasthan Royal’s player, Swapnil Asnodkar, the Mumbai CESTAT held that no service tax is leviable on Brand Promotion Fee.
The respondent is a Professional cricketer and has played in Indian Premier League representing Rajasthan Royals. For the period 2008-2012, he received a sum of Rs. 1.12 crores under an agreement entered into with the Franchise owners.
The department said that the said amount is subject to service tax under the head Business Auxiliary Services on the ground that the amount received by him is towards playing for IPL and for promotional activities.
Upholding the order of the lower authorities, the Tribunal bench said that there is no specific clause of Section 65 (19) defining Business Auxiliary service has been shown to be applicable to levy service tax.
“It is not appearing from the show cause notice as to what goods or services the Respondent have promoted or helped to promote,” the bench said.
The bench further relied on the decision in the case of Sourav Ganguly Vs. UOI wherein the Calcutta High Court held that the services of brand promotion before 01.07.2010 are not taxable.
“We also find that as per the clause 4 and 4.8 of the agreement only 10% of the total sum receivable is towards Promotion of Brands of Goods, services and events and the remaining is towards match fees. The Brand promotion fee was not taxable until Negative list came into effect from 01.07.2010 and hence there cannot be any liability upon the Respondent till that period. Further, from the agreement it is explicit that the fee towards brand promotion which falls under Business Auxiliary Service has remained below the exemption limit of Rs. 10 lakhs in respective years after 01.07.2010 and hence there is no liability upon Respondent to pay service tax.”To Read the full text of the Order CLICK HERE