New Delhi, Jan 16 (PTI) The Supreme Court on Friday set aside a service tax demand raised on fees paid to international speakers invited for the Hindustan Times Leadership Summit, holding that such payments do not fall within the ambit of “event management service” under the Finance Act.

A bench comprising Justices J B Pardiwala and Justice K V Viswanathan held that the fees paid to booking agents for securing international speakers for a summit cannot be taxed under the category of "event management service.” Justice Pardiwala, who authored the judgement, allowed the appeal of HT Media Limited.

The verdict dealt with the question “whether the fee paid by the appellant to the personalities/speakers, through their booking agents is liable to service tax under the reverse charge mechanism, more particularly under the taxable category of 'Event Management Service' under Sections 65(40) and 65(41) read with Section 65(105)(zu) of Chapter V of the Finance Act".

It set aside a 2017 order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which previously held HT Media Limited liable for service tax on payments made to overseas agents.

The dispute traces back to the annual Hindustan Times Leadership Summits held between 2009 and 2012.

To bring high-profile global figures, including former UK prime minister Tony Blair, former US vice-president Al Gore, and astronaut Jerry Linenger, to the event, HT Media entered into contracts with specialised booking agencies like the Washington Speakers Bureau and the Harry Walker Agency.

The revenue department issued show-cause notices proposing to levy service tax on the fees paid to these speakers through booking agents under the category of 'event management service', invoking the extended period of limitation.

The total tax demand involved was approximately Rs 60.56 lakh. The Commissioner confirmed the demand along with interest and penalties on February 13, 2014.

On appeal, the CESTAT partly allowed HT Media’s plea by setting aside the invocation of the extended period of limitation.

However, the CESTAT upheld the service tax demand for the normal period, holding that the payments attracted service tax under event management service.

The tribunal simultaneously rejected demands under management consultancy service and business support service categories.

The verdict rejected the revenue's broad interpretation and emphasised the principle of strict interpretation of taxing statutes.

“If the revenue satisfies the court that the case falls strictly within the provisions of law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners, no tax can be imposed by inference or by analogy,” it said.

“The speaker does not plan, promote, organise or present the event. Participation in the event cannot be considered as management of the event. This precisely is the fundamental error committed by the revenue,” it added. PTI SJK ARI

Fees paid to international speakers at summits are not taxable as event management service under reverse charge. Payments to overseas booking agents for securing international speakers for a summit do not constitute event management service subject to service tax under the reverse charge mechanism because speakers and their agents do not plan, promote, organise or present the event; participation alone is not management, and taxing statutes must be strictly construed.