The Chairperson clarified that, as per clause 34 of the Finance Act, 1994 "event management"

Indian Service Tax

Clarifications

Point No. 4A

An event management company claims expenses like travelling, lodging, boarding etc. separately in the bill (reimbursement of actual expense incurred which forms part to the extent of about 50 per cent of the total bill amount) whether service tax is payable on such reimbursement?

Reply

The Chairperson clarified that, as per clause 34 of the Finance Act, 1994 "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 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. The event manager is required to carry out different functions and all such services provided by the event manager are liable to service tax. Hence expenses like travelling, lodging, boarding etc. cannot be allowed as reimbursement from the bills as all such activities are part and parcels of "event management".

(Authority: RAC on 30/12/2002, Mumbai-ll Commissionerate)

Trade Fair

Cir.N o. 68/17/2003-ST, Date: 28/11/2003

Sub:- Clarification on the scope of the Service of "Event Management" Regarding.

An issue has been raised whether a firm/person who are undertaking activities of organising “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.

2. "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. B 11/1/2002- 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 Tax is not on Event as such but on the service provided for managing an event.

3. The above provisions & 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 organized 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 in case where that event is organised /managed by the sponsor himself, no service tax is payable as "Event Management".