SERVICE TAX EXEMPTIONS TO SPORTS RELATED ACTIVITIES

[Dr. Sanjiv Agarwal]

Services to Recognized Sports Bodies

Under this entry, following services are exempt from levy of service tax –

Services provided to a recognised sports body by—

(a)      an individual as a player, referee, umpire, coach or manager for participation in a sports event organized by a recognized sports body;

(b)      another recognised sports body;

"Recognized sports body" means (i) the Indian Olympic Association, (ii) Sports Authority of India, (iii) a national sports federation recognised by the Ministry of Sports and Youth Affairs of the Central Government, and its affiliate federations, (iv) National Sports Promotion Organisations recognised by the Ministry of Sports and Youth Affairs of the Central Government, (v) the International Olympic Association or a federation recognised by the International Olympic Association or (vi) a federation or a body which regulates a sport at international level.

Services provided to a recognized sports body by an individual as a player, referee, umpire, coach or manager for participation in a event (tournament or championship) organized by a recognized sports body are exempt from service tax. Similarly services by a recognized sports body to another are exempt. Services by individuals such as selectors, commentators, curators, technical experts etc are taxable.

The service of a player to a franchisee which is not a recognized sports body is taxable. However, services of an individual as umpire, referee when provided directly to a recognized sports body shall be exempt.

       Sponsorship of Tournaments or Championships

Following services shall be exempt from levy of service tax—

Services by way of sponsorship of sporting events organised -

(a)      by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any district, State or zone;

(b)      by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India, Special Olympics Bharat;

(c)      by Central Civil Services Cultural and Sports Board;

(d)     as part of national games, by Indian Olympic Association; or

(e)      under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme;

Such an exemption was also available earlier vide Notification No. 30/2010- ST dated 22.6.2010

Both, sponsorship and sports have not been defined in the Act. Earlier, sponsorship was defined under section 65 (99 a). Accordingly, Sponsorship included naming an event after the sponsor, displaying the sponsor's company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition; but does not include any financial or other support in the form of donations or gifts, given by the donors subject to the condition that the service provider is under no obligation to provide anything in return to such donors. taxmanagementindia.com

Events, i.e., tournaments or championships organized only by specified bodies in relation to games, sport, cultural events etc shall be exempt. Any sponsorship of event organized by any other body like BCCI arranging IPL cricket tournament shall not be exempt.

Vide Notification 30/2012-ST dated 20.6.2012, entire service tax is payable by the body corporate or partnership firm receiving the service in India under reverse charge method.

 

 

 

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