Business Support Service: composite player fees for matches and promotions are not taxable; CBEC instruction cannot create levy.

Remuneration paid to a professional player by a league franchisee for match participation and promotional activities does not qualify as a 'business support service' under Section 65(104c) of the Finance Act, 1994; the Tribunal applied statutory interpretation and precedent to conclude fees for playing are services of a professional performer, not independent contractor business-support services, and therefore outside the taxable ambit. The decision also holds that a departmental instruction (CBEC circular of 26 July, 2010) cannot lawfully expand the statutory charging provision to impose service tax on composite fees; appeal allowed for the assessee.

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Issues: Whether remuneration received by an IPL player from franchisees for playing matches and for promotional activities can be taxed as "business support service" under Section 65(104c) of the Finance Act, 1994, and whether the CBEC instruction dated 26 July, 2010 can be relied upon to tax composite fees if segregation is not possible.

Analysis: The Tribunal examined precedent including the Calcutta High Court decision in Sourav Ganguly and Tribunal authorities holding that IPL players engaged under franchise contracts are not rendering business support services as independent contractors for the franchisees but perform as professional players subject to franchise control. The Tribunal considered the legal scope of Section 65(104c) of the Finance Act, 1994 and the limits of administrative instructions, noting that a board instruction or circular cannot expand statutory taxing provisions or create a tax liability where the statute does not provide it. The reasoning applied prior decisions which held that fees for playing matches fall outside taxable services and that the CBEC instruction of 26 July, 2010 cannot lawfully subject a composite fee to service tax when the statute does not contemplate such a levy.

Conclusion: The Tribunal concluded that the remuneration received by the player from the IPL franchisee could not be taxed under "business support service" and that the CBEC instruction dated 26 July, 2010 cannot be used to create a tax liability on composite fees. The appeal is therefore allowed in favour of the assessee.

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