By TIOL News Service

NEW DELHI, MAY 04, 2016: THE petitioner challenges the legislative competence for the levy of Service Tax on the sale of tickets for the Indian Premium League (IPL) Cricket Tournament.

The grounds are that by virtue of the amendments by the Finance Act, 2015 to the Finance Act, 1994 with effect from 1st June, 2015 together with the Service Tax Notification No. 06/2015 dated 1st March, 2015 and the Circular No. 334/5/2015-TRU dated 28th February, 2015 the earlier negative list setting out items in respect of which Service Tax was not leviable included 'entertainment' which in terms of Section 66D(j) (now omitted) included sporting events. It is further pointed out that under Section 2(i) of the Delhi Entertainments and Betting Tax Act, 1996 the expression 'entertainment' includes ‘games, sport or race'. It is, therefore, contended that tax on entertainment, which the Petitioner is in any event paying, is within the exclusive domain of the State as per List II of the 7th Schedule to the Constitution. It is, therefore, submitted that in respect of the same taxable event there cannot be a levy of service tax by the Union on the sale of tickets and a levy of entertainment tax by the State.

The secondary submission is that in terms of the Agreement entered into between the Petitioner and the Board of Control for Cricket in India (BCCI) there is an obligation on the Petitioner to provide BCCI 20% free tickets in every category. Inasmuch as the Petitioner should not be made liable to pay Service Tax on such ‘free tickets'.

The High Court noted that for the current IPL season, the Petitioner had already collected Service Tax on the tickets sold. And, therefore, having collected the Service Tax in terms of the impugned amendments in the Finance Act, 1994, there is an obligation on the Petitioner to deposit such Service Tax with the Central Government.

Therefore, the High Court viewed that the only interim order that can be passed, while reserving the rights and contentions of both the parties at the final hearing of the writ petition, is to direct that the Service Tax as collected and deposited by the Petitioner during the pendency of the present writ petition will be subject to the final outcome of the petition.

The application was disposed of.

(See 2016-TIOL-883-HC-DEL-ST)