Sponsorship rights for a cricket team were not taxable as sponsorship services, and double taxation on the same transaction was rejected.

Consideration paid for exclusive cricket team sponsorship rights was treated as outside the service tax category of sponsorship services. The Tribunal followed its earlier view that sponsorship of a cricket team did not fall within that taxable head, and it also noted that tax on the same transaction had already been discharged by the recipient under business auxiliary service. On that basis, a second levy on the same consideration under a different classification was not justified, and the service tax demand was set aside.

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Issues: Whether the amount paid for sponsorship rights to Kings XI Punjab was liable to service tax under the category of sponsorship services.

Analysis: The dispute turned on the tax treatment of consideration paid under an agreement for exclusive sponsorship rights. The Tribunal followed its earlier view that sponsorship of a cricket team was not covered by the sponsorship service category. It also noted that service tax on the same transaction had already been discharged by the recipient under business auxiliary service, and a second levy on the same transaction on the basis of a different classification was not justified.

Conclusion: The demand of service tax was not sustainable and the appeal was allowed.

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