India: GMR Sports challenges Center’s levy of Service Tax for IPL matches

May 9, 2016

IPL, being a cash rich event, has always found itself in controversies including a recent one, on levying of taxes on the retailing of tickets. An interim order was passed in the case of
GMR Sports Private Ltd vs. Union of India & Others (WP (C) No. 3793/2016), granting ad-interim ex-parte relief on the application filed on the levy of Service Tax on the sale of tickets for the Indian Premier League (IPL) Cricket Tournament. The Delhi High Court ruled that GMR Sports should continue to deposit service tax with the government during the pendency of the writ petition. In an interim order, the Court held that these taxes shall be subject to final outcome of the petition.

Facts and Background of the Case

The dispute is about the levy of Service Tax on the sale of tickets for the Indian Premium League (IPL) Cricket Tournament, by virtue of the amendments to the Finance Act, 1994 with Service Tax Notification issued and Circular No. 334/5/2015-TRU issued.

Submission by GMR. (Petitioner)

The grounds on which the challenge is made was for the levy of Service Tax on the sale of tickets for the Indian Premium League (IPL) Cricket Tournament. The Service Tax should be not leviable on ‘entertainment’ which in terms of Section 10(j) (now omitted) included sporting events. Also under Section 2(i) of the Delhi Entertainments and Betting Tax Act, 1996 the expression ‘entertainment’ includes ‘games, sport or race’. It is, therefore, contended that tax on entertainment, which the Petitioner is in any event paying, is within the exclusive domain of the State as per List II of the 7th Schedule to the Constitution.

That in respect of the same taxable event viz., there cannot be a levy of service tax by the Union on the sale of tickets and a levy of entertainment tax by the State.

That the ground of the challenge is of legislative competence.

That in terms of the Agreement entered into between GMR and the Board of Control for Cricket in India (BCCI) there is an obligation on the Petitioner to provide BCCI 20% free tickets in every category.

It is submitted that the Petitioner should not be made liable to pay Service Tax on such ‘free tickets’.

The sample of the Tickets sold were Annexed as evidence with the present petition.


Upon the submission made on the issue of providing ‘Free Tickets’, it will require examination of the Agreement between the Petitioner and the BCCI in some detail. On another contention, while reserving the rights and contentions of both the parties at the final hearing of the writ petition, the Court took the view that this is the only interim order that can be passed at this stage. The Court directed that the Service Tax as collected and deposited by the Petitioner during the pendency of the present writ petition will be subject to the final outcome of the petition.

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