The ticketing portal enters into agreements with cinema homes for fee of tickets booked by means of its platform. When tickets are booked through its platform, it receives an quantity in direction of the ticket price alongside with a comfort payment and remits the ticket price to the cinema home or occasion holder. It had duly paid service tax on the comfort payment earned by it. CESTAT bench famous that it didn’t retain any quantity that was acquired from card companies and that was supposed to be paid to cinema homes.
During the interval from monetary yr 2010-11 to monetary yr 2014-15, it collected round Rs. 52.78 crores from card companies. The service tax authorities contended that BookMyShow was required to pay a service tax of 6.33 crore and raised a requirement discover. This was contested, by stating that the ticketing portal was contractually obliged to gather the precise price of tickets, and the identical was remitted to cinema homes.
For permitting the card companies to increase provides of reductions and free tickets, it had additionally entered into agreements with numerous card companies. When the final word buyer used an eligible financial institution’s credit card for fee or buy of cinema or different present tickets, the distinction between the fee made by the client and the fee acquired by cinema homes was borne by the credit card firm and was routed by means of BookmyShow, for which it issued debit notes to the card companies.
CESTAT dismissed the income division’s declare that BookMyShow was offering enterprise assist companies to credit card companies.
TOI has earlier analysed these points within the context of Goods and Services Tax (GST). In this story, Pratik Jain, oblique tax companion at Price Waterhouse had defined, “However, if the bank/UPI payment gateway merely join hands with the seller/e-portal, both work on an independent basis and offer discounts/incentives on their own account directly to the customer, there may be no GST implications. This is because, arguably neither of the parties derive any benefit from the other. Clear cut language in the contractual documents is a must.”