The Supreme Court on Tuesday dismissed a petition filed by the service tax department seeking to levy tax to the tune of around Rs 5.77 crore on Citibank for its sponsorship of the IPL during May 2008 to January 2010. A bench headed by Chief Justice HL Dattu rejected the plea filed by commissioner of service tax, which submitted that sponsorship of IPL is not sponsorship of any sport event as IPL in itself is not a sports event but an entity of franchisee teams, and therefore, taxable.
“On the same analogy, the sponsorship received by a player or a team would be independent of sport event and hence taxable. Thus, the exclusion clause of sports event under sponsorship service is not available to the bank,” the revenue authorities said in appeal against the sectoral tribunal.
