Individual contract for booking persons for participation in event not event management liable to service tax

Individual contract for booking of persons for participation in an event is not “event management” contracts liable to service tax – Supreme Court

In a recent judgment Hon’ble Supreme Court has held that Individual contract for booking of persons required for participation in the event are not commonly understood as “event management” contracts and hence not liable to service tax as “Event Management Service” under Section 65(105)(zu) read with Sections 65(40) and 65(41) respectively of Chapter V of the Finance Act 1994.

ABCAUS Case Law Citation:
4997 (2026) (01) abcaus.in SC

In the instant case, the appellant had challenged the judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal (the CESTAT) holding that the appellants were liable to pay Service Tax under the category of “event management service” for the period covered within the normal limitation.

The appellant was an Indian mass media and publishing company. It conducted annual Leadership Summit (the Summit). Famous Speakers were invited from outside India to address the Summit. The appellant entered into contracts with booking agents to book speakers such as Mr. Tony Blair, Mr. Jerry Linenger and Mr. Al Gore.

Show cause notices were issued to the appellant under the Finance Act, 1994 (the Finance Act) inter alia proposing to impose Service Tax on fees paid to the speakers through the booking agents under the category of “Event Management Service” under Section 65(105)(zu) read with Sections 65(40) and 65(41) respectively of Chapter V of the Finance Act by invoking the extended period of limitation. Later the SCN were adjudicated with demand of Service Tax invoking the extended period of limitation under Section 73 of the Finance Act with interest and penalty, was also confirmed. 

The Hon’ble Supreme Court observed that tenor of the agreements/contracts and the declaration given by the agents clearly indicated that the services rendered by such agents to the assessee were in the nature of booking the speakers for the event to be organized by the assessee. The contracts were entered into with the agents qua each speaker laying down the modalities of his/her visit and consideration for the same.

The Hon’ble Supreme Court opined that such services cannot be equated with “event management service” which has been statutorily defined to mean “any service provided in relation to planning, promotion, organizing or presentation of any arts, entertainment, business, sports, marriage or any other event and includes any consultation provided in this regard”. The contract of the asseessee with the booking agents was not for “management of an event” but for booking of the speaker.

The Hon’ble Supreme Court observed that the entire submission of the revenue focuses on the aspect as to whether a “principal-agent” relationship is established between the speaker and the booking agent. However, it was irrelevant for the present controversy as the issue was not whether the relationship between the speaker and the booking agent is that of “principal-agent” or not. The issue was whether the contract constitutes “event management service”.

The Hon’ble Supreme Court further observed that the presence of the speaker is essential for the event cannot be disputed. However, whether the service of the speaker or the agent on behalf of the speaker can be considered to be “event management service” is altogether a different issue. The speaker does not plan, promote, organize or present the event. Thus, the speaker, is neither an “event manager” nor does he provide an “event management service”. Similarly, the booking agent who merely books the speaker also acts in the capacity of an agent or representative for agreeing to the terms of the speakers’ presence at the event. Participation in the event cannot be considered as management of the event. This precisely is the fundamental error committed by the revenue as well as by the Tribunal while imposing Service Tax on the service in question under the category of “event management service”.

The Hon’ble Supreme Court also observed that, what as per CBIC Circular dated 08.08.2022 is sought to be covered is the service of management or organizing of the event, and the revenue cannot be allowed to stretch the application of such a clause beyond its contours.

The Hon’ble Supreme Court further observed that levy fails even on application of common parlance test. Even if this test of interpretation of sales tax statutes is applied for interpreting the clause for imposing Service Tax, the contract in question cannot be considered to be commonly understood as that of event management. The expressions ‘event management’ and ‘event managers’ is commonly understood in the sense of appointing someone to manage or organize the event. Individual contract for booking of persons required for participation in the event are not commonly understood as “event management” contracts.

Accordingly, appeals were allowed and the impugned judgment and order passed by the CESTAT was set aside.

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