Customs, Excise & Service Tax Appellate Tribunal: The bench of Anil Choudhary (Judicial Member) and P.V. Subba Rao (Technical Member), while deciding the appeal filed by All India Football Federation (‘AIFF’) against the order passed by the Central Board and Service Tax, Audit-II, held that AIFF had concurred to the agreement, whereby the rights were transferred from Zee Entertainement Enterprises Pvt. Ltd. (‘ZEEL’) to IMG Reliance Pvt. Ltd (‘IMGR’) which does not amount to rendering any service.

Factual Matrix of the Case

An audit was conducted of the records of ZEEL whereby it was found that AIFF had earlier entered into an agreement with ZEEL, granting commercial rights for broadcasting for a period of 10 years.

Eventually, five years into the agreement, a tripartite agreement was signed between AIFF, ZEEL and IMGR by which commercial rights which were earlier granted to ZEEL were transferred to IMGR. In consideration of this transfer, IMGR paid to ZEEL a ‘termination fee’ of Rs. 70 crores on behalf of AIFF.

Revenue found the amount paid by IMGR to ZEEL as callable to service tax under the category of “granting rights or permitting commercial use or exploitation of any event including an event relating to art, entertainment, business, sports or marriage” under section 65(105)(zzzzr) of the Finance Act, 1994.

Submission of the Appellant

AIFF denied any liability of service tax payable on the ‘termination fee’ paid to ZEEL by IMGR on behalf of AIFF, as they were not at the receiving end of the payment. They further contended that before the negative list regime was introduced, service tax could be charged only on specified services and this case was not covered under section 65 (105) (zzzzr).

Submissions of the Respondent

The rights which were originally granted to ZEEL were effectively returned to AIFF through the tripartite agreement and were then transferred to IMGR. However, instead of AIFF returning an amount to ZEEL and collecting an amount from IMGR, the amount was transferred directly from IMGR to ZEEL through the tripartite agreement as “termination fee” which was paid on behalf of AIFF. It was therefore alleged that the said amount was paid as consideration for the commercial rights which IMGR received from AIFF through the tripartite agreement.


  1. Whether the amount paid by IMGR to ZEEL as ‘termination fee’ as per tripartite agreement entered between AIFF, ZEEL and IMGR be taxed?

  2. Whether such tax must be paid by the appellant under the category of “permitting commercial use or exploitation of any event service” under section 65(105)(zzzzr) of the Finance Act, 1994?

Findings of the case

The Tribunal held that at the time when ZEEL was granted the rights, they were not taxable and if ZEEL had continued to use the rights for full 10 years, no tax would have been payable.

The Tribunal said that the rights were not returned to AIFF for any amount of consideration that could be stated for termination of the original contract. AIFF did not sell the rights to IMGR and therefore, does not come under the taxable slab under section 65 (105) (zzzzr). The tripartite agreement circumvented the situation by transferring the rights from ZEEL to IMGR directly with the concurrence of AIFF for a consideration known as the ‘termination fee’ paid by IMGR to ZEEL.

Accordingly, it was held that AIFF did not render any service but concurred with the agreement. The Tribunal further opined that the amount paid by IMGR to ZEEL on behalf of AIFF cannot be considered as an amount paid to AIFF for any service.

[All India Football Federation v. Commissioner of Central Good and Service Tax, Audit-II, 2022 SCC OnLine CESTAT 780, decided on 09-12-2022]

Advocates who appeared in this case :

N.K. Gupta, Advocate, for the Appellant;

Dr. Radhe Tallo, Authorized Representative for the Department, for the Respondent.

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