"Event Management" means any service provided in relation to planning, promotion, organising or presentation of any arts

Indian Service Tax

Event Management Service

Effective Date: 16/08/2002

Authority: Notification No. 8/2002-ST, dt. 1/8/2002 (for full text of Notification see under'Beauty Par/our').

Rate of Service Tax: 8% from 14/5/2003 (5% upto 13/5/2003). 10% from 10/9/2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.

Definitions

"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, [Section 65 (40)] .

"Event Manager" means any person who is engaged in providing any service in relation to event management in any manner, [Section 65 (41)]

Taxable service:- Event management service provided by such agency or event-manager in relation to management of any event including any consultation provided in this regard.

Value of taxable service:- Gross amount charged by the event-manager from clients for services of event-management.

Exemptions

• If the event is organized/managed by the sponsor himself

• Sale proceeds of tickets or revenue generated from sale of space F. No. B-II/I/2002-IRU, dt. 1/8/2002

• Trade Fair & Exhibitions - Cir. No. 68/17/2003-ST, dt. 28/11/2003

• Space selling

Person liable to pay: Event Manager

Head of Account

Sl. Code SCCD Minor-head 004400149 Event Management Services 00440196 Sub-head 00440014901 Tax Collection 00440197 113 Sub-head 00440014902 Other Receipts 00440198 116 Sub-head 00440014903 Deduct Refunds 00440199 115

Main text of Departmental Circular/TN

F. No. Bll/1I2002-TRU, Date: 1/8/2002

1. The section referred to hereinafter are the sections or clauses of the Finance Act, 1994 as amended by the Finance Act, 2002. Reference to sub­clause or clause means clause or sub-clause of Section 65 of the Finance Act, 1994 as amended by the Finance Act, 2002.

2. 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.

3. An 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, electricals, 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.

4. 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.

5. 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 sevice”. 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.