Free Tickets for IPL Matches subject to GST: AAR [Read Order]

Free Tickets - Taxscan

The Authority for Advance Ruling (AAR), Punjab has ruled that GST is payable on providing complimentary/ free tickets as the said activity would constitute a ‘service’ as defined by the Central GST Act and is subject to tax.

The applicant, Mohali-based KPH Dream Cricket Pvt Ltd, which runs Kings XI Punjab sought for a clarification regarding the tax liability on free-tickets. The tax is binding in Punjab but can influence Other SWIMS as well.

The authority observed that when the application issues a complimentary ticket to any person, he is certainly agreeing to the obligation of refraining from the act of stopping the complimentary ticket holder from enjoying his services, while he would certainly stop a person not holding any complementary ticket and who has not paid any money from receiving services provided by the applicant. The applicant is also agreeing to the obligation of tolerating the act of the recipient to enjoy the services provided by the applicant free of charge and the applicant is also agreeing to the obligation of  doing the act of allowing entry to the complimentary ticket holder to enjoy services being provided by the applicant when he issues such complimentary ticket.

“Thus, it is seen that the activity of the applicant in issuing complimentary tickets to persons is covered under each limb of para 5(e) of Schedule II of the CGST Act, 2017. Therefore, by this measure too, the activity of the applicant of providing complimentary tickets free of charge to some persons for enjoying cricket matches would also be covered under the scope of supply as per section 7(1)(d) 9 In view of the above discussion and findings, it would be clear that the activity of the applicant of providing complimentary tickets free of charge to some persons would be considered supply of service as per provisions of both Section 7(1)(a) and 7(1)(d) and would therefore be leviable to tax as per provisions of Section 9 of the CGST Act, 2017 and the parallel Section 9 in the Punjab GST Act, 2017,” the authority said.

With regard to the question that whether he is eligible to claim Input Tax credit in respect of complimentary tickets, the authority held that “since the activity of providing the complimentary tickets would amount to supply under provisions of CGST Act and parallel provisions of Punjab GST Act, 2017 and would be leviable to tax under section 9 of the said Acts, the question of whether Input Tax Credit would be available on inputs going into such complementary.”

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