Free or complementary tickets given by franchise owners for the Indian Premier League matches will attract Goods and Services Tax, the Authority for Advance Ruling said.
In response to an application filed by KPH Dream Cricket Pvt Ltd., which owns and operates IPL cricket team Kings XI Punjab, the Punjab bench of the AAR has ruled that providing complementary tickets free of charge would be considered supply of service and therefore amount to levying of tax.
The GST rate on sale of IPL tickets is 18 percent. The AAR also ruled that KPH Dream Cricket would be eligible to claim input tax credit on taxes paid for such complimentary tickets only to the extent of input and input service for such tickets.
The AAR said when the applicant issues a complimentary ticket to any person, the applicant is "certainly displaying an act of forbearance by tolerating persons who are receiving the services provided by the applicant without paying any money, which other persons not receiving such complimentary tickets would have to pay for”.
Stating that the complementary tickets given by KPH Dream Cricket to various persons would certainly be covered by the term 'token' and 'voucher', the AAR said that as per GST laws, the monetary value of forbearance would naturally be pegged to the amount of money charged from other persons not receiving the 'complementary tickets' for availing the same services.
"The applicant has clearly missed the import of clause (b) in the definition of 'Consideration' given in section 2(31) of the CGST Act, 2017 which certainly covers the activity of the applicant of giving 'complementary tickets' to certain persons in the furtherance of his business and would thus be covered under scope of supply defined in Section 7(1)(a) of the CGST Act, 2017," the AAR said.
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