The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Allahabad bench has held that service tax under reverse charge mechanism (RCM) cannot be imposed for broadcasting cricket matches played in foreign countries.
The appellants, Sporty Solutionz Pvt. Limited had acquired ‘Media / Broadcasting rights’ of various sporting events from M/s Taj TV Ltd., Mauritius, for broadcasting cricket matches between Bangladesh and Zimbabwe (to be played outside India), in Bangladesh territory on payment of rights fee/license fee, and further sold/sub-licensed to other parties for broadcasting in Bangladesh only, against consideration in the name of rights/license fee. The service tax department raised a demand that the appellant was liable to pay service tax under ‘Reverse Charge Mechanism’ (RCM) for acquiring such rights from persons located outside India as recipients of services under the category of ‘Commercial Exploitation of Rights of Sports Events’ up to June 2012 falls under the definition of Services, not included in the negative list w.e.f 01.07.2012.
Allowing the plea of the appellants, the Tribunal bench comprising Judicial Member Mr. Anil Chaudhari and Technical Member Mr. P Anjani Kumar observed that “Further Rule 6 of the Place of Provision of Service Rules, 2012, provides and clarifies that in case of any cultural or sporting event and/or services related to such event, shall be the ‘place’ where the event is actually held. We find that admittedly the event was held outside India (Zimbabwe), and this service has not been received in India, rather it was meant for Bangladesh, for which territory, the telecasting rights were purchased and resold by the appellants. Only for the reason that the appellant provider or trader of telecasting right is located in India, it cannot be assumed or presumed by any stretch of the imagination, that the service under dispute has been received in India.”
CA Abhinav Kalra appeared for the appellants.
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