TMI Blog2017 (11) TMI 1406X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Governments authorized the appellants to organize and promote the lotteries. The nature of consideration that will accrue to the appellant for their services will not by itself decide the tax liability. The consideration is determined by mutual consent in terms of the agreement. In the present case on the overall receipts by sale of lottery, the State Government gets certain percentage as their share. For organizing, promoting and marketing the lottery the appellants get the consideration (retained amount) as per the terms of the agreement - tax liability upheld. Valuation - Held that: - the provisions of Section 67 (2) are very clear to the effect that gross amount charged by the service provider should be inclusive of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Business Auxiliary Service in terms of Section 65 (105) (zzb) of the Finance Act, 1994. The Revenue initiated proceedings against the appellant to demand and recover service tax with the period 16/11/2004 to 31/03/2010 by issuing two show cause notices dated 20/10/2009 and 20/07/2010. The case was adjudicated resulting in the impugned order. The Original Authority held that the appellants are liable to service tax only w.e.f. 16/05/2008. He confirmed the liability of 27,79,334/- alongwith penalties under Section 76 and 77 of the Finance Act, 1994. 2. The learned Consultant appearing on behalf of the appellant submitted mainly on the following lines :- (a) the appellants are not engaged in providing any taxable service that can be ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India 2012 (28) S.T.R. 344 (Ker.), the Hon ble High Court held that the distributors of lottery tickets are liable to service tax under BAS. Further, the learned AR also submitted that without the services of the appellant, the State Governments cannot carry out the activity of lottery business. The appellants were given a range of responsibility starting from organizing to disbursal of price money. This by itself will show that they are acting on behalf of the State Government and the services are squarely covered by BAS. 4. We have heard both the sides and perused the appeal record. The Original Authority examined the terms of agreements which were subject matter of present dispute. First of all, applying the ratio of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities starting from designing, organizing, promoting and marketing the said lotteries. The intention is to have maximum income both for the State Governments as well as to the appellant. 7. The fact that appellants are engaged in promotion and marketing of lottery of the State Governments cannot be disputed. Services in relation to promotion or marketing of a service of client is liable to tax. We are not able to accept the proposition of the appellant that the State Governments are not their client. The terms of the agreement are clear that the State Governments authorized the appellants to organize and promote the lotteries. The nature of consideration that will accrue to the appellant for their services will not by itself decide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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