Consolidated contract of sponsorship & % sharing of profit
This query is : Resolved
M.K. Madan
(Querist)
21 December 2012
Ours is a pvt ltd. company.we have entered into a consolidated contract with an athlete for sponsorship.in lieu of his sponsorship service we shall be making a fixed payment to him plus a % share in profit from increased sales.It is known to us that the the company is liable to pay service tax under reverse charge on the fixed amount paid but whether the profit sharing will also be liable to service tax?please clarify.
Kaushik Vinod
(Expert)
25 December 2012
Hi Madan,
service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include ( A list is given) Section 65B(44)of Finance Act.
Consideration has not been defined in Service tax Law but the reference has made to Indian Contract Act,1872.
The profits received for performing service is taxable and the same has been also explained in the guidance note of the CBEC.
Thanks
service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include ( A list is given) Section 65B(44)of Finance Act.
Consideration has not been defined in Service tax Law but the reference has made to Indian Contract Act,1872.
The profits received for performing service is taxable and the same has been also explained in the guidance note of the CBEC.
Thanks
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- EPF ECR NEW FILE SEP 17TH 2026
- Clarification Requested: Gift → NRO → NRE → Overseas Transfer - USA/CANDA (FEMA & Tax Compliance)
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- Under marginal scheme
- How to Handle Active E-Invoices in GST Portal Deleted from Tally?
- Utilisation Fy 25-26 TDS challans in Fy 26-27 TDS Return
- Non filing of I T Returns
- TAX AUDIT ON PROFESSIONAL INCOME
- TDS on Fixed Assets purchased
- Oct 2025 Invoices
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
