Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-023525-023526 – 2017 |
| Diary Number | 34384/2017 |
| Judge Name | HON’BLE MR. JUSTICE J.B. PARDIWALA |
| Bench | HON’BLE MR. JUSTICE J.B. PARDIWALA; HON’BLE MR. JUSTICE K.V. VISWANATHAN |
| Precedent Value | Binding authority on service-tax classification |
| Overrules / Affirms | Affirms strict interpretation of taxing provisions; distinguishes but does not overrule International Merchandising Company LLC |
| Type of Law | Service Tax under Finance Act, 1994 (positive list regime) |
| Questions of Law | Whether fees paid to booking agents for procuring speakers fall under “Event Management Service” (Section 65(105)(zu)) by reverse charge |
| Ratio Decidendi | The Supreme Court held that statutory definitions of “event manager” (s. 65(41)) and “event management” (s. 65(40)) require planning, promotion, organisation or presentation of an event. Booking agreements for speaker appearance do not satisfy those definitions; taxing provisions must be strictly construed within their four corners. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court | The appellant organized an annual leadership summit, engaged foreign-speaker booking agents (Washington Speakers Bureau, Harry Walker Agency), received show-cause notices for service tax under “Event Management Service,” and saw the demand upheld by CESTAT under the normal limitation. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All tax authorities, CESTAT benches and subordinate courts |
| Persuasive For | High Courts on service-tax classification disputes |
| Distinguishes | International Merchandising Company LLC v. Commissioner, Service Tax, New Delhi (2023 (3) SCC 641) |
| Follows | Shiv Steels v. State of Assam (2025 SCC Online SC 2006); Commissioner of Sales Tax v. Jaswant Singh Charan Singh (1967 SCC Online SC 154) |
What’s New / What Lawyers Should Note
- Speaker-booking contracts do not constitute “event management service” under Sections 65(40), 65(41) and 65(105)(zu).
- Positive-list regime demands strict four-corner compliance; taxing provisions cannot be extended by analogy.
- CBIC TRU Circular (08.08.2002) confirms event managers must handle venue, logistics, publicity, artists, not mere booking.
- Common-parlance test excludes booking-only services from “event management.”
- Distinguishes International Merchandising: where speaker attendance was ancillary, here speaker is the event’s core.
Summary of Legal Reasoning
- Service-tax leviability pre-1 July 2012 is confined to positive list (s. 65(105)) and reverse charge (s. 66A).
- Statutory definitions:
- “Event management” (s. 65(40)): planning, promotion, organising or presentation of an event, including consultation.
- “Event manager” (s. 65(41)): person providing any service in relation to event management.
- Taxable service (s. 65(105)(zu)): service by event manager in relation to event management.
- Booking-agent agreements only secure speakers’ appearance; do not involve planning or organising.
- Strict interpretation: taxing provisions must cover service within their precise statutory contours (Shiv Steels).
- CBIC TRU Circular clarifies event-manager tasks; booking agents fall outside.
- Common-parlance test confirms ordinary understanding excludes mere speaker procurement.
- International Merchandising precedent is factually distinguishable—there, participation was ancillary; here, speaker presence and booking are integral but not managerial.
Arguments by the Parties
Petitioner (Appellant)
- No service provided by agents to appellant; agents act solely on behalf of speakers.
- Agents are not “event managers” under s. 65(41) or TRU Circular.
- Contracts relate only to speaker procurement, not event logistics or consultation.
- Service should classify as “manpower recruitment or supply agency” (s. 65(105)(k)), per International Merchandising.
Respondent (Revenue)
- Booking agents ensured speakers’ presence, integral to event, thus provided event management service.
- Agents are independent contractors, not mere representatives of speakers.
- Consideration paid to agents for procuring speakers constitutes service by event manager under s. 65(105)(zu).
- International Merchandising is inapplicable.
Factual Background
HT Media organized an annual leadership summit and contracted foreign speakers (e.g., Tony Blair, Al Gore) through booking agents. Show-cause notices invoked service tax under “Event Management Service” for fees paid via agents. The Commissioner confirmed tax demand under extended limitation; CESTAT upheld tax under normal limitation for event management but struck down other demands. The appellant appealed to the Supreme Court.
Statutory Analysis
- Section 66/66A: levy of service tax and reverse-charge mechanism.
- Section 65(105): positive list of taxable services; entry (zu) for event management service, entry (k) for manpower recruitment.
- Section 65(40): definition of “event management.”
- Section 65(41): definition of “event manager.”
- Section 65A: classification hierarchy—most specific entry prevails.
- Section 73: recovery of unpaid service tax.
Dissenting / Concurring Opinion Summary
No separate dissent or concurrence was filed; both judges delivered a unanimous judgment.
Alert Indicators
- ✔ Precedent Followed – Strict interpretation of taxing statutes (Shiv Steels).
- 🔄 Conflicting Decisions – Distinguishes International Merchandising Company LLC.