Monday, February 2, 2015

BCCI to pay service tax on reverse charge basis on payments made to foreign Cos for audio-visual coverage of IPL matches

Services received by BCCI from foreign media companies for coverage of Indian Premier League Matches through audio-visual coverage of the cricket matches are covered under 'Programme production services' and liable to service tax on reverse charge basis.

a)Assessee, BCCI, received services from foreign media companies for coverage of Indian Premier League Matches.

b)As per agreements, such non-resident service providers were required to provide audio-visual coverage of the cricket matches conducted by BCCI and digitalized images of coverage were uploaded and broadcasted for benefit of the viewers of cricket match all over the world.

c)Department demanded service tax from BCCI under reverse charge.

d)Tribunal held in favour revenue:

.Section 65(86a) of the Finance Act, 1944 defines "programme" as any audio or visual matter, live or recorded, which is intended to be disseminated by transmission of electro-magnetic waves through space or through cables intended to be received by the general public either directly or indirectly through the medium of relay stations.

a.The Tribunal in its judgment observed that non-resident service providers had installed cameras in stadium to capture images of cricket matches.

b.A combination of audio and visual recording would be a programme and expression 'audio or visual matter' in section 65(86a) can be read as 'audio and visual matter' also, hence, activities undertaken by non-resident service providers would fall within definition of 'programme' and service providers would be 'programme producers', as defined.

c.Even services rendered by way of supply of equipments and personnel for recording live programmes and actually participating in such programmes would also fall within definition of 'programme producer's services’.

e)The Supreme Court dismissed appeal preferred against the judgment of Tribunal holding there was no infirmity in the said judgment - Board of Control for Cricket In India v. Commissioner of Service Tax, Mumbai-I [2015] 53 533 (SC).