HT Media not liable to pay service tax on foreign speaker bookings for Leadership Summit: Supreme Court

The Supreme Court on Friday held that HT Media Ltd is not liable to pay service tax under the reverse charge mechanism on fees paid to overseas agents for booking the foreign speakers invited to its Leadership Summit [HT Media Limited Vs Principal Commissioner GST]

A Bench of Justice JB Pardiwala and Justice KV Viswanathan set aside a contrary ruling of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

The Court ruled that such payments could not be classified as “event management services” under the Finance Act, 1994, and therefore did not attract service tax liability on a reverse charge basis.

The reverse charge mechanism places the obligation to pay service tax on the recipient of a service instead of the provider. This mechanism is often invoked where services are rendered by foreign entities to Indian recipients.

A copy of the judgment is yet to be uploaded.

The dispute concerned service tax demands for the period between October 2009 and March 2012, involving a revenue implication of around ₹60 lakh.

The Revenue alleged that fees paid by HT Media to book agents of eminent foreign personalities invited to speak at the Leadership Summit was part of “event management services” and thus taxable under Sections 65(40), 65(41) and 65(105)(zu) of the Finance Act.

The tribunal upheld the demand, prompting HT Media to approach the Supreme Court.

The Court examined the statutory scheme governing service tax during the relevant period and reiterated that a levy can be sustained only if the activity in question clearly falls within a defined taxable category under the Finance Act. It opined reverse charge liability in respect of services provided from outside India arises only if the underlying service itself is taxable under the Act.

Taking note of a Central Board of Excise and Customs (CBEC) circular on event management services and the relevant statutory provisions, the Court concluded that booking foreign speakers through agents for the Leadership Summit did not meet the statutory requirement to be classified as taxable event management services.

Accordingly, the Court set aside the impugned tribunal order and allowed HT Media’s appeal, bringing the service tax proceedings against it to an end.

“In the overall view of the matter, we have reached the conclusion that the appeal deserves to be allowed,” the Court held.

The petitioners were represented by advocates Ashok Dingra, Karan Bharihoke and Sonia Gupta.

The respondents were represented by advocates VC Bharathi, Gurmeet Singh Makker,SK Singhania, PV Yogeshwaran and Annirudh Sharma.