Nature of supply— In the instant case, the appellant has entered into a Franchise Agreement in the month of April, 2008 with the Board of Control for Cricket in India (‘BCCI) for the purpose of establishing and operating a cricket team in the Indian Premier League (‘IPL’) under the title of ‘Punjab Kings’. Appellant participates in the IPL with other franchisees where the matches are held at the home and away venues as designated by the BCCI-IPL.

The Appellant intends to distribute match tickets to local Governmental authorities/officials, consultants, etc. free of cost as a goodwill gesture for promotion of business. These tickets are to be distributed without any consideration flowing from the receivers to the Appellant.

The primary question to be decided is whether the activity of providing “complimentary tickets” by the appellant falls within the definition of supply under the Punjab GST Act,2017 /CGST Act,2017 and whether the appellant would be required to pay tax on such complimentary tickets. As per the appellant, complimentary tickets are provided without any consideration as a goodwill gesture for promotion of business. These tickets are to be distributed without any consideration flowing from the receivers to the Appellant. In the absence of any consideration it cannot be treated as supply under section 7 of the Act.

The definition of supply under section 7 of the Act is an inclusive one and the broad contours of the supply have been defined to include all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. The two key elements that are required to be present for any activity or transaction to fall within the ambit of supply are “consideration” as well as “furtherance of business”. 

The argument by the appellant that on account of absence of consideration in such activity or transaction, the same should not fall within the territory of supply is well taken and therefore the activity of providing such free or complimentary tickets is not a supply as per the GST Act. 

Held that— 

a) Activity of providing free complimentary tickets does not fall within the domain of supply as it does not have the element of consideration. However, where such complimentary tickets are being provided by the appellant to a related person or a distinct person the same shall fall within the ambit of supply on account of Schedule I of the Act and the appellant would be liable to pay tax on the same;

b) The appellant would not be eligible to avail input tax credit in relation to such activity. But, where such activity or transaction is treated as supply on account of being provided by the appellant to a related person or a distinct person the appellant would be entitled to avail input tax credit for the same.