Hiring Global Speakers for Media Summit Does Not Constitute ‘Event Management Service’: Supreme Court [Read Judgement]

The Supreme Court of India ruled that contracts entered into for hiring global speakers for a media summit do not amount to taxable “event management service” under the Finance Act, 1994, and that service tax cannot be levied on such arrangements.

The case arose from a judgment of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, which had partly upheld a service tax demand against HT Media Limited for fees paid to foreign speakers through overseas booking agencies for the Hindustan Times Leadership Summit.

HT Media organises an annual leadership summit and invites well-known international personalities to speak at the event. HT Media entered into contracts with foreign booking agencies such as the Washington Speakers Bureau and the Harry Walker Agency to secure their participation. These agencies arranged the speakers’ appearances and collected appearance fees on behalf of the speakers.

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The Service Tax Department issued show cause notices alleging that the payments made to the booking agencies were liable to service tax under the category of event management service. The Commissioner confirmed the demand. On appeal, the Tribunal set aside the demand raised using the extended period of limitation but upheld the service tax demand for the normal limitation period. Aggrieved by this, HT Media approached the Supreme Court.

Before the Supreme Court, HT Media’s counsel argued that the booking agencies did not provide any event management service. They argued that the agencies only acted as booking agents for the speakers and had no role in planning, organising, promoting, or managing the summit. The counsel argued that booking speakers is different from managing an event and cannot be taxed as event management service.

The revenue counsel argued that the speakers were central to the summit and that ensuring their presence was an essential part of the event. They argued that by procuring the speakers for consideration, the booking agencies provided services related to the presentation and organisation of the event and thus fell within the scope of event management service.

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The bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan observed that the contracts entered into by HT Media were only for booking speakers and not for managing the event. The court observed that participation in an event is not the same as management of the event. It observed that the booking agencies did not manage venues, publicity, logistics, or overall execution of the summit.

The court explained that tax laws must be interpreted strictly and a service can be taxed only if it clearly falls within the charging provision. The court pointed out that even in common understanding, booking a speaker cannot be treated as event management. It also observed that the question of whether the agencies were agents of the speakers was not decisive for deciding tax liability.

The court held that the service provided by booking agencies for hiring speakers does not qualify as event management service under the Finance Act, 1994. It set aside the Tribunal’s order and allowed the appeals filed by HT Media Limited, holding that the service tax demand was not sustainable.

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