2026-VIL-511-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Sponsorship Service, Sharing of advertisement expenses under ‘Co-op Partner Agreement’ - Appellant, engaged in sale of gold jewelry, entered into a Co-Op Partner Agreement with World Gold Council (WGC) to jointly promote sale of gold jewelry through media advertisements wherein the WGC agreed to share 25% of the total media expenses incurred by the appellant - Department of the view that the appellant providing "Sponsorship Service" to WGC and demanded service tax – HELD - The arrangement between the appellant and WGC does not amount to provision of any service, much less sponsorship service, by the appellant to WGC. The amount received by the appellant is not a consideration for any service but rather the share of expenses incurred for the promotional advertisement services availed from a third party - The fact that the Appellant is required to provide the invoice of the vendor who undertakes the activity of such promotion advertising in order for WGC to part with its contribution is indicative of the fact that the Appellant is not providing any service to WGC, rather the expenses incurred in such promotional advertising by engaging the services of a vendor who provides the service of advertisement, is merely being agreed to be shared - For a transaction to attract service tax, there must be an identifiable service provider and service receiver, with the transaction reflecting provision of a taxable service by the provider to the recipient for a consideration, which is absent in the present case - The impugned order is set aside and the appeal is allowed
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