IPL, being a cash rich event, has always found itself in
controversies including a recent one, on levying of taxes on the
retailing of tickets. An interim order was passed in the case of
GMR Sports Private Ltd vs. Union of India &
Others (WP (C) No. 3793/2016), granting ad-interim
ex-parte relief on the application filed on the levy of Service Tax
on the sale of tickets for the Indian Premier League (IPL) Cricket
Tournament. The Delhi High Court ruled that GMR Sports should
continue to deposit service tax with the government during the
pendency of the writ petition. In an interim order, the Court held
that these taxes shall be subject to final outcome of the
Facts and Background of the Case
The dispute is about the levy of Service Tax on the sale of
tickets for the Indian Premium League (IPL) Cricket Tournament, by
virtue of the amendments to the Finance Act, 1994 with Service Tax
Notification issued and Circular No. 334/5/2015-TRU issued.
Submission by GMR. (Petitioner)
The grounds on which the challenge is
made was for the levy of Service Tax on the sale of tickets for the
Indian Premium League (IPL) Cricket Tournament. The Service Tax
should be not leviable on 'entertainment' which in terms of
Section 10(j) (now omitted) included sporting events. Also 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.
That in respect of the same taxable
event viz., there cannot be a levy of service tax by the Union on
the sale of tickets and a levy of entertainment tax by the
That the ground of the challenge is
of legislative competence.
That in terms of the Agreement
entered into between GMR 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.
It is submitted that the Petitioner
should not be made liable to pay Service Tax on such 'free
The sample of the Tickets sold were
Annexed as evidence with the present petition.
Upon the submission made on the issue of providing 'Free
Tickets', it will require examination of the Agreement between
the Petitioner and the BCCI in some detail. On another contention,
while reserving the rights and contentions of both the parties at
the final hearing of the writ petition, the Court took the view
that this is the only interim order that can be passed at this
stage. The Court directed 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.
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