The central government has introduced the concept of Negative List w.e.f. 01-07-2012, under which all persons providing any SERVICE which is not covered under the Negative List (Sec. 66 D) or Mega Exemption Notification (Notification No. 25/2012 dated 20-06-2012) shall be liable to pay Service Tax, subject to an exemption of the Threshold Limit of Rs. 10 Lakhs (Notification No. 33/2012 dated 20-06-2013).
Frequently Asked Questions:-
FAQ 1: What is considered as a Service, under the Service Tax?
Ans. 1: Service [As per section 65 B (44)] means any activity carried out by a person for another for a consideration, and includes a declared service.
FAQ 2: Is the services provided by a Player, coach, referee, umpire or a team manager for participation in a sporting event organized by BCCI considered as a Service under the ‘Service Tax’
Ans. 2: YES
FAQ 3: Is this service covered under the Negative List?
Ans. 3: NO
FAQ 4: Is there any relief for sportsman under the Mega Exemption Notification?
Ans. 4: Following exemptions are provided under the Mega Exemption Notification for sportsman:-
PARA 8: Services by way of training or coaching in recreational activities relating to arts, culture or sports;
PARA 10: Services provided to a recognised sports body by-(a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body;(b)another recognised sports body;
FAQ 5 : If a person is a coach or trainer associated with BCCI on contract, will he be covered under PARA 8 of the Mega Exemption Notification?
Ans.5 : NO – The important point of consideration in para 8 is that the coaching/ training should be for recreational purpose and not for any professional development. Whereas the coaches attached with BCCI or affiliated bodies are training professionals and not leisure seekers.
FAQ 6: Whether BCCI is a recognized sports body for coverage under Para 10 of the Mega Exemption Notification?
Ans. 6 : A ‘Recognised Sports Body is defined at S. No.(za) of Para 2 of Mega Exemption Notification. The critical areas for consideration are as below:-
|
S. No. |
Qualification for a Recognised Sport Body |
Whether BCCI Qualifies under the Criterion |
Remarks |
Impact |
|
1. |
The Indian Olympic Association |
No |
- | - |
|
2. |
Sports Authority of India |
No |
- | - |
|
3. |
A National Sports Federation (NSF) recognised by the Ministry of Sports and Youth Affairs of the Central Government, and its affiliate federations |
No |
BCCI has not been recognised as a National Sports Federation for the year 2013: LIST OF NATIONAL SPORTS FEDERATIONS | - |
|
4. |
National Sports Promotion organizations recognised by the Ministry of Sports and Youth Affairs of the Central Government |
No |
- | - |
|
5. |
The International Olympic Association or a federation recognised by the International Olympic Association |
No |
Although ICC is recognised by IOA but this is not applicable on its affiliated associations | - |
|
6. |
A federation or a body which regulates a sport at international level and its affiliated federations or bodies regulating a sport in India |
Yes |
ICC is an international federation which regulates cricket and BCCI is its affiliates federation/ body regulating cricket in India. | It will cover only BCCI and not its affiliated federations |
FAQ 7: Which payment received by a player, referee, coach, umpire and a team manager are covered under the Para 10 of the Mega Exemption Notification?
Ans. 7 : Details of coverage and non-coverage is discussed as below:-
|
S. No. |
Nature of Payment |
Coverage under Para 10 of Mega Exemption Notification |
|
A. |
Match Fees for participation in any sporting event |
Covered |
|
B. |
Annual Contract Fees as a team member |
Covered |
|
C. |
Prize Money for Extraordinary Performance |
Not Covered |
|
D. |
Annual Share in Profit |
Not Covered |
|
E. |
Receipts from Endorsements and Advertising Contracts |
Not Covered |
|
F. |
Receipts as Brand Ambassadors |
Not Covered |
|
G. |
Receipts for participating in various events like award functions, hotel inauguration etc |
Not Covered |
FAQ 8 : What was the position prior to 01-07-2012?
Ans. 8: Prior to 01-07-2012 services listed under para 1 to 4 of the Ans. 7 above were non taxable for all sportsman including BCCI and its affiliated federations. However, Endorsements, Sponsorships, Event Participation fees etc were taxable even before 01-07-2012.
FAQ 9: What is the suggestion for a player associated with BCCI or its affiliated federation – who has not got himself, registered till date and has been receiving taxable revenue from BCCI or its affiliated federations?
Ans. 9: The player should apply for registration under Service Tax to cover there liability w.e.f. 01-07-2013.In order to save the interest and penalties for delays in registration, payment of taxes and filling of returns upto 31-12-2013 – A declaration should be made under the Service Tax Voluntary Compliance Encouragement Scheme, 2013.
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