In organising an event or any function so many integrities needs to be taken care, that it is virtually impossible for a common man to look after all by itself and therefore, now-a-days event managers are hired for making arrangements and organizing the event. The services of an event manager includes planning, promotion, organizing, presentation of any arts, entertainment, business, sports, marriage or any other event.
Any event manager is hired to execute an event such as product launch of any corporate, promotional activities, concerts/rock show, official meets, award functions, beauty pageants, entertainment events, exhibitions, private functions and sports events, etc. Event manager uses his expertise and ideas to manage an event. Event manager is supposed to manage a venue, sets including decoration of sets, mandap, chair, table, barricades, sound, light video, electrical ,security, communication, invitations to the event/sale of tickets and publicity of the event. He has also to manage the stage show, artist, musician, choreographers and other miscellaneous items for holding of event. All services provided by the event manager are liable to service tax. This also covers any consultation provided for organizing an event. [Para 3, Circular F.No. B.11/1/2002-TRU, dated 1-8-2002
Such codes are no longer statutory but used for statistical purpose for the purpose of registration and for payment of tax as specified vide Circular No.165/16/2012 –ST dated 20.11.2012:
Tax Collection of Service
Interest and penalties on such service
Value of Taxable Service
Section 67 read along with Service Tax (Determination of Value) Rules, 2006 provides the manner of determining the value of taxable services on which services tax should be levied.
In respect of Event Management Services, no specific provision for determination of taxable value has been provided. However it has been clarified that the value of taxable services is the total amount of consideration consisting of all components of the taxable service and it is immaterial that the details of individual components of the total consideration are indicated separately in the invoice. Thus, the value of taxable Event Management Services is to be determined in terms of provision of Section 67 read with the prescribed Rules.
Vide Circular No B/11/1/2002-TRU, dated 01.08.2002 it has been clarified that the gross amount charged by the event manager from the client for organising the event is liable to be included in the value of taxable service that includes charges paid to the photographers, videographer, sound recorder etc.
No abatement has been granted to any person liable to pay service tax under the Section.
Small Service Provider
Vide Notification No 33/2012-ST, dated 20.06.2012 – Exemption to Small service providers having taxable turnover of less than 10 Lakhs and providing services other than by way of under a brand name.
Import of Technology
Vide Notification No. 14/ 2012-ST, dated March 17, 2012 – Exemption in respect of Taxable service involving import of technology, from so much of service tax, as is equivalent to the extent of amount of R&D Cess payable on the said transfer of technology under the provisions of section 3 of the Research and Development Cess Act, 1986.
To Foreign Diplomatic missions and their personnel
Vide Notification No 27/2012-ST, dated 20.06.2012 – Exemption for all the taxable services provided by any person, for the official use of a foreign diplomatic mission or consular post in India, or for personal use or for the use of the family members of diplomatic agents or career consular officers posted therein.
Services by TBI or STEP
Vide Notification No 32/2012-ST, dated 20.06.2012 – All taxable services provided by TBI or STEP have been exempted
Services provided to SEZ
Vide Notification No 40/2012-ST, dated 20.06.2012, all taxable services received by a Unit located in a Special Economic Zone (SEZ) or Developer of SEZ for the authorized operations, has been exempted from the levy of whole of the service tax.
No Specific Exemption had been granted by the government in case of Event Management Services.
Provisions relating to point of taxation
The point of taxation will be governed by Rule 3 of Point of Taxation Rules, 2011. As per the said rules, the Point of Taxation will be the date of issue of invoice or the date of receipt of payment, whichever is earlier. In case the invoice is not issued within 30 days of booking (provision of service), the date of booking will be the point of taxation.
Provisions relating to Place of Provision of Service Rules, 2012
The Place of Provision of Service Rules, 2012 contains Rule 6 which provides that place of provision shall be place where event is held. For detail, please refer Para 15.7. of the Book.
Provisions relating to reverse charge
These services are not included under the mechanism of Reverse Charge. Hence, the person providing the service shall be the person liable to pay service
The section referred to hereinafter are the sections or clauses of the Finance Act, 1994 as amended by the Finance Act, 2002. Reference to sub-clause or clause means clause or sub-clause of section 65 of the Finance Act, 1994 as amended by the Finance Act, 2002.
As per clause (34), “event management” means any service provided in relation to planning, promotion, organising or presentation of any arts, entertainment, business, sports or any other event and includes any consultation provided in this regard. Vide clause (90)(zu), taxable service means any service provided to a client, by an event manager in relation to event management. Event manager has been defined in clause (35) as any person who is engaged in providing any service in relation to event management in any manner.
Any event manager is hired to execute an event such as product launch of any corporate, promotional activities, concerts/rock show, official meets, award functions, beauty pageants, entertainment events, exhibitions, private functions and sports events, etc. Event manager uses his expertise and ideas to manage an event. Event manager is supposed to manage a venue, sets including decoration of sets, mandap, chair, table, barricades, sound, light video, electrical ,security, communication, invitations to the event/sale of tickets and publicity of the event. He has also to manage the stage show, artist, musician, choreographers and other miscellaneous items for holding of event. All services provided by the event manager are liable to service tax. This also covers any consultation provided for organizing an event.
For managing an event, the event manager hires the services of photographer, videographer, sound recording studio, advertising agency, mandap keeper and security agency. Service tax is already leviable on the amount paid to these agencies by the event manager. A point has been raised as to whether the amount paid by the event manager to such agencies will be includible in the value on which he is liable to pay service tax. It is clarified that the taxable service is any service provided by the event manager in relation to management of event. Therefore the gross amount charged by the event manager from the client for organizing the event is liable to be included in the value of the taxable service for the purpose of calculation of service tax.
A point has been raised as to whether in the case where event is organized/managed in-house but certain contractors are appointed say for stage/mandap preparation, for lighting/sound system, for advertising the event etc. and revenue is generated by renting out the exhibition space and sale of ticket, whether service tax will be leviable on the amount charged by the contractors or on the amount generated by sale of space or tickets etc. It is clarified that service tax is not on the event but on the service provided for managing an event. Therefore in a case where the event is organized/managed by the sponsor himself, no service tax is payable as “event management”.
However, the contractors who provide service as mandap keeper, videographer, security agency etc. are no doubt liable to pay service tax on their “taxable service”. It is clarified that service tax under the category of event management is not leviable on the sale proceeds of tickets or revenue generated from the sale of space.
CBEC Circular No. 68/17/2003-ST, Dated 28-11-2003
An issue has been raised whether a firm/person who are undertaking activities of organizing “Trade Fairs” and Exhibitions soliciting the participation from the trade and Industry and provides space or may in addition provide furniture, cabins, security, electricity, etc., and charge their customers accordingly fall within ambit of “Event Management” or not.
“Event Management” [sec. 65(40)] means any person who is engaged in providing any service in relation to event management in any manner. Further, as per clarification issued by service tax Instruction F. No. BII/1/2002-TRU, dated 1-8-2002 that (a) an event manager is hired to execute an event such as product launch of any corporate, promotional activities, exhibitions and private functions, etc. Event Manager users his expertise and ideas to manage an event; (b) Service Taxis not on event as such but on the service provided for managing an event.
The above provisions and clarifications lead to one conclusion i.e. for occurrence of taxable event ‘provision of event management service’, there has to be a sponsor at whose behest an event is organised and event manager, who organises such services. Therefore, it is to clarify that service tax is not on the event but on the service provided on managing an event. Therefore incase where the event is organised/managed by the sponsor himself, no service tax is payable as “Event Management”.
Circular no. 96/7/2007-ST, dated 23-8-2007, as amended by Circular no. 98/1/2008-ST, dated 4-1-2008
Organizers of Trade Fairs and Exhibitions solicit participation from the trade and industry and provide space and other facilities, including furniture, cabins, security, electricity, etc.,to display products and provision of services.
Whether services provided by the organizers of trade fairs/exhibitions are covered within the scope of event management service [section65(105)(zu)]?
Trade fairs and exhibitions are organized by persons. Such organizers of trade fairs and exhibitions provide services to exhibitors in relation to business exhibition. Services provided by an organizer of trade fairs and exhibitions to an exhibitor in relation to business exhibition is liable to service tax under “Business Exhibition Service”
In addition, an organizer of the trade fair or business exhibition may engage an event manager to provide service to the organiser in relation to organising trade fairs and exhibitions. In such cases, the event manager renders the service of “Event Management” to the organisers and is liable to pay service tax under “Event Management Service”.
The two services, namely “Business Exhibition Service” and “Event Management Service”, and the two service providers of the respective services are distinct.