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2018 (2) TMI 235 - AT - Service TaxLiability of service tax - sponsorship agreement - consideration received for providing stands / boxes inside the stadium - Held that: - appellants have not granted any right to the sponsors to display their products on the boxes / stands. So also there is no right given in the sponsorship agreement to display any advertisement. The sponsor has only right to display his name on the stand / box. Further, they are also given exclusive priority booking rights. The definition of sponsorship reveals that the activity carried out by the appellant by entering such sponsorship agreements are more akin to sponsorship service which are taxable only with effect from 1.5.2006. Further, these sponsorship services are in relation to sports events and are not taxable services as laid down under section 65(105)(zzzn) of the Finance Act, 1994 - the amount received as per sponsorship agreements for boxes and stands are not leviable to tax under Sale of Space for Advertisement and requires to be set aside. Penalty - Held that: - the issue was interpretational and there was sufficient cause for not discharging the service tax liability - penalty set aside. The demand in respect of sponsorship services needs to be verified and segregated from the total demand confirmed by the adjudicating authority - appeal allowed by way of remand.
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