MUMBAI: The Authority for Advance Ruling (AAR) Punjab declared in a court ruling on Saturday that free or complimentary tickets given by franchise owners for matches in the cash-rich Indian Premier League (IPL) will attract Goods and Services Tax (GST) since it is a supply of service, Press Trust of India reports. The GST rate on the sale of IPL tickets is 18 per cent.
AAR has confirmed this in response to an application filed by KPH Dream Cricket Pvt Ltd, which owns and operates IPL’s Kings XI Punjab franchise. The owners would be eligible to claim input tax credit (ITC) on taxes paid for such complementary tickets only to the extent of input and input service for such tickets.
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”, according to the AAR.
Stating that the complementary tickets given by K P H Dream Cricket to various persons would certainly be covered by the term ‘token’ and ‘voucher’, the AAR said 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.
