Supreme Court Clears Service Tax on Speaker Fees; Booking Speakers Is Not Event Management

Supreme Court Clears Service Tax on Speaker Fees; Booking Speakers Is Not Event Management

HT Media Limited organised the annual Hindustan Times Leadership Summit and invited international speakers such as Tony Blair and Al Gore. The speakers were booked through overseas booking agencies like Washington Speakers Bureau and Harry Walker Agency. The Service Tax Department issued show cause notices alleging that payments made to these agencies attracted Service Tax under “event management service” for the period October 2009 to March 2012, invoking the extended limitation period.

The Commissioner confirmed the demand. While CESTAT dropped the extended limitation, it upheld the tax demand for the normal period. HT Media challenged this finding before the Supreme Court.

Main Issue: Whether fees paid to speakers through booking agents for participation in an event can be classified as “event management service” under Sections 65(40), 65(41) and 65(105)(zu) of the Finance Act, 1994.

SC’s Decision: The Supreme Court allowed the appeals and set aside the CESTAT order. The Court held that booking a speaker for an event is fundamentally different from managing an event. Event management involves planning, promotion, organisation or presentation of an event, such as managing venues, logistics, publicity, stage arrangements and allied activities. The booking agents merely facilitated the speakers’ participation and did not undertake any event management functions. Participation of a speaker does not amount to management of the event.

The Court ruled that the service did not fall within the taxable category of “event management service”. Therefore, no Service Tax could be levied on the payments made by HT Media.

To Read Full Judgment, Download PDF Given Below