Employment-style cricket contract not taxable as brand promotion, while separate promotional receipts may qualify for small scale exemption.

A cricket player's remuneration under a team agreement was treated as arising from an employment-style arrangement with the team owner, so it was not taxable as brand promotion or Business Auxiliary Service. The Tribunal also accepted that separate promotional activity for a brand owner could qualify as service, but its taxability had to be tested against the small scale exemption threshold under Notification No. 06/2005-ST, subject to verification of the gross value calculation. On that basis, the demand was held unsustainable and the appeals were allowed.

---

---

Issues: (i) Whether remuneration received for playing cricket under the team agreement constituted taxable brand promotion or Business Auxiliary Service; (ii) Whether the consideration received for promotional activities from a brand owner was exempt under the small scale exemption notification.

Issue (i): Whether remuneration received for playing cricket under the team agreement constituted taxable brand promotion or Business Auxiliary Service.

Analysis: The dominant arrangement was found to be one of employment between the cricket player and the team owner, and the player was not directly engaged in promoting any brand owner's product. On the same legal footing as earlier identical agreements, such receipt did not amount to provision of Business Auxiliary Service.

Conclusion: This issue was decided in favour of the assessee.

Issue (ii): Whether the consideration received for promotional activities from a brand owner was exempt under the small scale exemption notification.

Analysis: The promotional activity for the brand owner was accepted as a service, but the Tribunal held that the value had to be examined against the threshold available under Notification No. 06/2005-ST dated 01.05.2005. Since the remuneration linked to the team arrangement was not taxable, the assessee could claim the exemption up to the applicable gross value limit, subject to verification of the calculation by the Revenue.

Conclusion: This issue was decided in favour of the assessee.

Final Conclusion: The demand was held unsustainable and the orders were set aside, resulting in allowance of the appeals.

Ratio Decidendi: Where a cricket player's engagement with a team owner is, in substance, an employment arrangement, the receipt for playing cricket is not taxable as brand promotion or Business Auxiliary Service, and the assessee may avail small scale exemption for any separately taxable promotional receipt within the prescribed threshold.

---