Author: Ashwarya Sharma, Advocate & Co-Founder, RB LawCorp
Date: 03/02/2026
1. Introduction
The expansion of indirect tax jurisprudence in India has often witnessed interpretative overreach by tax authorities, particularly in service classification disputes where the economic importance of an activity is sought to be equated with taxability.
In a significant and timely ruling, the Supreme Court in HT Media Ltd. v. Principal Commissioner, Delhi South GST – 2026-TIOL-06-SC-ST has decisively curtailed such expansionist tendencies by laying down clear parameters for the levy of Service Tax under the category of “event management service.”
Although rendered under Chapter V of the Finance Act, 1994, the judgment carries enduring relevance under the GST regime, where disputes relating to classification of services, composite supplies, and artificial bundling continue to arise. At its core, the decision reaffirms a foundational principle of tax law: taxability must arise strictly from statutory text and contractual substance, not from perceived indispensability of an activity.
2. Factual Matrix and the Tribunal’s Approach
HT Media Ltd. organised the annual Hindustan Times Leadership Summit, a globally recognised forum featuring distinguished speakers, including former Heads of State and senior political leaders from outside India.
To secure their participation, HT Media entered into contracts with overseas booking agencies, which negotiated the terms of appearance, honorarium, travel, and logistical arrangements on behalf of the speakers.
The Service Tax department sought to tax the consideration paid to these agencies under “event management service,” contending that procuring speakers was integral to organising the Summit.
The CESTAT upheld the departmental view, holding that the speakers constituted the essence of the Summit and that ensuring their presence amounted to rendering event management services.
3. Submissions on Behalf of the Assessee
The appellant argued that:
- The contracts were limited solely to booking speakers
- There was no involvement in planning, promotion, organisation, or management of the event
- The cumulative statutory ingredients required to attract tax under “event management service” were not satisfied
Reliance was placed on the commercial understanding of an event manager, who ordinarily undertakes end-to-end responsibility including venue management, publicity, logistics, security, and coordination — functions entirely absent in the present case.
4. Revenue’s Case and the Theory of Indispensability
The Revenue contended that:
- Booking agents acted as independent contractors, not authorised agents of the speakers
- Payments were made to the agents and not directly to the speakers
- Without speakers, the Summit would lose its significance, making the procurement of speakers inseparably linked to event organisation
This argument rested heavily on the theory of indispensability.
5. Issue Before the Supreme Court
The Supreme Court framed the central issue as:
Whether the fee paid by HT Media Ltd. to speakers, through booking agents, was liable to Service Tax under the category of “event management service,” particularly under the reverse charge mechanism.
6. Findings on the Nature of Contract and Scope of Event Management
The Court analysed the statutory framework under the Finance Act, 1994, including Sections 65(40), 65(41), 65(105)(zu), 66, and 66A, along with the TRU Circular dated 08.08.2002, which clarified that event management services cover management or organisation of events, not ancillary or individual inputs.
Upon examining the agreements, the Court found that:
- The contracts were strictly for booking speakers
- They governed duration of speech, media interaction, and honorarium
- No responsibility for organising or managing the Summit was transferred
The Court categorically held that participation in an event, or facilitation thereof, cannot be equated with management of the event, and that the Tribunal erred in conflating importance with taxability.
7. Interpretation of Statutes: Reinforcing Doctrinal Certainty
7.1 Strict Interpretation of Taxing Statutes
The Supreme Court reiterated that charging provisions must be strictly construed, relying on Shiv Steels v. State of Assam – 2025-TIOL-69-SC-CT, where it was held:
“If the case is not covered within the four corners of the taxing statute, no tax can be imposed by inference or analogy.”
Applying this principle, the Court held that contribution to an event’s success does not determine taxability.
7.2 Common Parlance Test and Commercial Understanding
The Court invoked the common parlance test, citing:
- Commissioner of Sales Tax v. Jaswant Singh Charan Singh (1967 SCC Online SC 154)
- Indo International Industries v. CST – 2002-TIOL-333-SC-CT-LB
It was held that even if an activity technically fits a definition, it must align with commercial understanding.
In common parlance, event management refers to comprehensive organisation of an event, not individual contracts for booking speakers.
8. Rejection of the Principal–Agent Theory
The Court dismissed the Revenue’s emphasis on the principal–agent relationship, holding that:
- Such enquiry is irrelevant for classification
- The decisive factor is the nature of service rendered under the contract
Since the service was limited to booking speakers, the levy was unsustainable.
9. Implications Under the GST Regime
Although rendered under the Service Tax regime, the judgment has direct relevance under GST, particularly in disputes involving:
- Event-related services
- Composite and bundled supplies
- Artificial classification by tax authorities
The ruling reinforces that every service connected with an event is not an event management service.
10. Conclusion
The decision in HT Media Ltd. reinforces the primacy of contractual substance in indirect tax jurisprudence.
It conclusively establishes that:
- Tax authorities cannot recharacterise transactions based on economic importance
- Classification must flow from statutory text and contractual obligations
- Essentiality to an event does not equate to event management
As GST jurisprudence continues to evolve, this ruling will stand as a critical precedent against interpretative excess and administrative convenience, anchoring taxation firmly in law and commercial reality.
📎 Attached PDF for detailed reading 👉
📎Full PDF Article Link (as published): https://taxindiaonline.com/news/guest_column/details?id=53489
(The author is a practicing advocate, Co-Founder and Legal Head of RB LawCorp.
He specializes in GST law. Suggestions or queries can be directed to
ashsharma@rblawcorp.in. The views expressed in this article are strictly
personal.)
