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Finance Bill Proposes mandatory pre-deposit of duty or penalty or both before filing of AppealBudget 2014-15 : Sale of space for advertising has been made taxable except for print media.Budget 2014-15 : Radio Taxis are now taxable.Budget 2014-15 : Education : The definition of Auxiliary Education Services has been scraped.Budget 2014-15 : Works Contract : 2 slab rates prescribed in place of earlier 3 slabs.Budget 2014-15 : E-payment of Service tax is being made mandatory with effect from 01.10.2014.Budget 2014-15 : POPS: Definition of intermediary is being amended to include the intermediary of goods in its scope.

Sponsorship Services [Sec 65(105)(zzzn)]
Effective upto 30th June, 2012
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Introduced With Effect From 1st May 2006
 
Contents
Scope
Exemption
Relevant Notifications / Circulars
News
Accounting Code
Service Tax 00440358
Interest 00440359
Penalty 00441444
 
DEFINITION:

According to Section 65 (105) (zzzn), to any person, by any other person receiving sponsorship, in relation to such sponsorship, in any manner;

According to Section 65 (99a), “Sponsorship” includes 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.

 
SCOPE:
TOP

Body corporate or firms involved in business or commerce sponsor events with an intent to obtain commercial benefit or bringing their name or products or services in public image to public attention by associating with a popular or successful event. This is an alternate form of advertisement. Consideration is normally paid in return for naming of the event after the sponsor or displaying the sponsoring company's logo or trading name or giving the sponsor exclusive or priority booking rights. Service tax is leviable only when the sponsor is any body corporate or firm. Sponsorship of sports events is excluded from the scope of this levy.

 
SERVICE TAX EXEMPTIONS:
TOP

(a)  Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/-  (Service Tax Notification No. 8/2008-ST dated 01.03.2008)

(b)  Services provided to the United Nations or International Organisations

(c)  Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers

(d)  Services which are exported as per ‘Export of Services’ Rules

(e)  Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.

(f)  Services provided by Reserve Bank of India

(g)  Out of total value of service provided proportionate value of goods and material provided by the Service Provider

 
RELEVANT SERVICE TAX NOTIFICATIONS:
TOP
Service Tax Notification No. 36/2010 S.T., dated 28-06-2010 Exemption for value of service received in advance by service providers prior to 01-7-2010
Service Tax Notification No. 30/2010-S.T., dated 22-06-2010 (Effective from 01-07-2010) Exemption to services provided to specific entities
Service Tax Notification No. 1/2007 S.T.,  dated 01-03-2007 Amendment to Service Tax Rules
 
RELEVANT SERVICE TAX CIRCULARS/INSTRUCTIONS/TRADE NOTICES:
Service Tax D. O. Letter F.No.334/03/2010-TRU , dated 01-07-2010 Clarification regarding issuance of notifications after enactment of the Finance Act, 2010, including the one in relation to exemption on advance received for sponsorship services.
Service Tax CBEC Instruction letter F. No.334/1/2010-TRU, dated 26-02-2010 Clarification regarding the changes made by the Finance Bill 2010 including the purpose and scope of amendment made to the definition of sponsorship services.
Service Tax CBEC Letter Dy. No 42/Comm-ST/2008, dated 08-02-2008 Instructions to field formations to examine applicability of service tax in respect of sponsorship services provided by the Indian Cricket League (ICL), and the Indian Premier League IPL)
Service Tax CBEC Instruction Letter File No. 334/4/2006-TRU dated 28.02.2006
 
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Case Laws Related

  • STO 2013 CESTAT 272
  • Sponsorship Service: Sports Event: Since the sponsorship agreement falls within the exclusionary clause i.e. the clause which excludes sponsorship services in relation to sports events, the appellant is clearly immune to the charge of service tax.

  • STO 2013 CESTAT 506
  • Sponsorship Service: Sale of Space or time for advertisement: Demand: Stay: Argument of the appellants that it was sponsorship service for which sponsorer was liable to pay service tax: On the basis of decision of pre deposit given by Tribunal in the case of United Spirits, directions issued to the appellants to make partial pre deposit.

    News Related

  • Service Tax on sponsorships dampens sports spirit
  • Service Tax on Sports Events - Time to Milk Cash Rich Cows
  • Service Tax Notices to IPL Sponsoring Companies.
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