Vat & wct in case of event management firm
This query is : Resolved
19 August 2013
Hi!
can anyone help me about VAT & WCT applicability in event management firm.is it necessary to take VAT no.for the firm.and also tell me if we are contracting with another company or party to held a program by call a DJ from abroad to performing in India,than in case of contracting with them only TDS(Contract)apply or is WCT applicability there???
And also you can ans.me at my Email:kehkashan@whitefoxindia.com
Regards,
Kehkashan Hussain
can anyone help me about VAT & WCT applicability in event management firm.is it necessary to take VAT no.for the firm.and also tell me if we are contracting with another company or party to held a program by call a DJ from abroad to performing in India,than in case of contracting with them only TDS(Contract)apply or is WCT applicability there???
And also you can ans.me at my Email:kehkashan@whitefoxindia.com
Regards,
Kehkashan Hussain
19 August 2013
from your question it is likely that
you organize musical event by calling artist from other country and you are not selling any goods, so VAT registration is not required.
As far as WCT is concern, you are not building/construction any structure which are transferred to other party, so WCT is not applicable.
As far as TDS is concern, specify the detail of transaction/payment so that i will advice which section of income tax is applicable
you organize musical event by calling artist from other country and you are not selling any goods, so VAT registration is not required.
As far as WCT is concern, you are not building/construction any structure which are transferred to other party, so WCT is not applicable.
As far as TDS is concern, specify the detail of transaction/payment so that i will advice which section of income tax is applicable
24 August 2013
Hi Umesh,
This is I know but my question is that when we are organizing the event and call the DJ, is entertainment tax applicable? and if we are just providing DJ to other party (at their venue-BAR) under an agreement and 50:50 cost of DJ (payment to him-artist fee) has been divided and this is payment didnt pay directly to the DJ it is through another agent contracted with our company only, now my question is should i raise an invoice for 50% cost of DJ to the party to pay the full amount to DJ or should charge service tax on that 50& cost? what happened is that as per my tax consultant i have charged S.T. on that amount and party has deducted TDS on that.but as per consultant tds should not be deducted on that amount.
please suggest me what should do??
This is I know but my question is that when we are organizing the event and call the DJ, is entertainment tax applicable? and if we are just providing DJ to other party (at their venue-BAR) under an agreement and 50:50 cost of DJ (payment to him-artist fee) has been divided and this is payment didnt pay directly to the DJ it is through another agent contracted with our company only, now my question is should i raise an invoice for 50% cost of DJ to the party to pay the full amount to DJ or should charge service tax on that 50& cost? what happened is that as per my tax consultant i have charged S.T. on that amount and party has deducted TDS on that.but as per consultant tds should not be deducted on that amount.
please suggest me what should do??
03 August 2025
Hi Kehkashan,
You're dealing with multiple tax implications for your event management firm under the pre-GST regime, involving VAT, WCT, Service Tax, and possibly Entertainment Tax.
Here's a detailed breakdown based on your situation (pre-GST laws apply since you're referring to VAT, Service Tax, and WCT):
🔹 1. Is VAT Registration Required for Event Management Firms?
Yes, VAT registration may be required if your firm:
Sells goods or transfers material (like stage setups, sound systems, lighting, etc.)
Even if you’re not trading in goods, but transferring property in goods during the execution of a contract (as in a works contract), VAT or WCT may apply.
So:
If you only provide services (e.g., coordinating, artist management, venue arrangement) → Service Tax applies.
If you also provide goods/materials (stage, LED screens, etc.) → VAT/WCT applies.
🔹 2. VAT vs. WCT Applicability in Your Case
If you're contracting a DJ from abroad, and your firm is billing the client for part or all of that artist's fees, then:
If there’s transfer of goods (e.g., sound setup or lighting), WCT (Works Contract Tax) under VAT may apply.
If it’s pure service (e.g., arranging artists, booking venue), then only Service Tax is applicable.
Example:
If your company provides:
DJ setup (sound + light) → WCT applicable
Artist coordination only → Service Tax applicable
🔹 3. TDS Applicability
You mentioned:
“You charged service tax, and party deducted TDS on that. Consultant says TDS should not be deducted.”
This depends on the nature of service:
If your invoice is for contractual services (Sec 194C, Income Tax Act) → TDS @2% or 1% is applicable.
If your invoice is purely for professional services (e.g., artist fees, agency fee), Sec 194J (10%) may apply.
If the invoice is only reimbursement, with proof, TDS may not apply, but usually companies still deduct it to avoid disallowance.
Your consultant might be arguing that TDS shouldn’t apply on reimbursement. However:
If you raised an invoice in your name (not clearly marked as pure reimbursement), TDS will apply.
Best practice: Reimbursements should be supported with:
Original artist invoice in DJ’s name
Your invoice clearly separating service component and reimbursement (non-taxable)
🔹 4. Entertainment Tax Applicability
Yes, Entertainment Tax may apply if the event is open to the public and entry fee is charged.
In your case:
If you’re just providing a DJ for a private bar event, no entertainment tax applies.
If your firm hosts a public show with ticket sales, Entertainment Tax is applicable (rate varies by state, e.g., Maharashtra, Delhi, etc.).
🔹 5. Summary of What You Should Do
Scenario Tax Applicable
Providing equipment + coordination VAT/WCT + Service Tax
Providing only artist/DJ coordination Service Tax
Invoice includes DJ fees (even via agent) Service Tax (on markup or total)
DJ event at public venue with ticketing Entertainment Tax
DJ event at private bar (B2B service) No Entertainment Tax
Invoice raised to client for 50% DJ cost Service Tax + TDS (likely under 194C)
✅ Recommendation
If you are raising an invoice to the other party for 50% of the DJ cost, charge service tax on your service portion or markup (if applicable).
If it's a reimbursement, better to have DJ invoice in original and bill them without markup (mention it clearly as a reimbursement with no tax).
TDS is correctly deducted under 194C if it's a contractual arrangement. Your consultant is possibly mistaken if he claims TDS is not applicable at all unless you are only passing on pure reimbursement without any contractual obligation.
You're dealing with multiple tax implications for your event management firm under the pre-GST regime, involving VAT, WCT, Service Tax, and possibly Entertainment Tax.
Here's a detailed breakdown based on your situation (pre-GST laws apply since you're referring to VAT, Service Tax, and WCT):
🔹 1. Is VAT Registration Required for Event Management Firms?
Yes, VAT registration may be required if your firm:
Sells goods or transfers material (like stage setups, sound systems, lighting, etc.)
Even if you’re not trading in goods, but transferring property in goods during the execution of a contract (as in a works contract), VAT or WCT may apply.
So:
If you only provide services (e.g., coordinating, artist management, venue arrangement) → Service Tax applies.
If you also provide goods/materials (stage, LED screens, etc.) → VAT/WCT applies.
🔹 2. VAT vs. WCT Applicability in Your Case
If you're contracting a DJ from abroad, and your firm is billing the client for part or all of that artist's fees, then:
If there’s transfer of goods (e.g., sound setup or lighting), WCT (Works Contract Tax) under VAT may apply.
If it’s pure service (e.g., arranging artists, booking venue), then only Service Tax is applicable.
Example:
If your company provides:
DJ setup (sound + light) → WCT applicable
Artist coordination only → Service Tax applicable
🔹 3. TDS Applicability
You mentioned:
“You charged service tax, and party deducted TDS on that. Consultant says TDS should not be deducted.”
This depends on the nature of service:
If your invoice is for contractual services (Sec 194C, Income Tax Act) → TDS @2% or 1% is applicable.
If your invoice is purely for professional services (e.g., artist fees, agency fee), Sec 194J (10%) may apply.
If the invoice is only reimbursement, with proof, TDS may not apply, but usually companies still deduct it to avoid disallowance.
Your consultant might be arguing that TDS shouldn’t apply on reimbursement. However:
If you raised an invoice in your name (not clearly marked as pure reimbursement), TDS will apply.
Best practice: Reimbursements should be supported with:
Original artist invoice in DJ’s name
Your invoice clearly separating service component and reimbursement (non-taxable)
🔹 4. Entertainment Tax Applicability
Yes, Entertainment Tax may apply if the event is open to the public and entry fee is charged.
In your case:
If you’re just providing a DJ for a private bar event, no entertainment tax applies.
If your firm hosts a public show with ticket sales, Entertainment Tax is applicable (rate varies by state, e.g., Maharashtra, Delhi, etc.).
🔹 5. Summary of What You Should Do
Scenario Tax Applicable
Providing equipment + coordination VAT/WCT + Service Tax
Providing only artist/DJ coordination Service Tax
Invoice includes DJ fees (even via agent) Service Tax (on markup or total)
DJ event at public venue with ticketing Entertainment Tax
DJ event at private bar (B2B service) No Entertainment Tax
Invoice raised to client for 50% DJ cost Service Tax + TDS (likely under 194C)
✅ Recommendation
If you are raising an invoice to the other party for 50% of the DJ cost, charge service tax on your service portion or markup (if applicable).
If it's a reimbursement, better to have DJ invoice in original and bill them without markup (mention it clearly as a reimbursement with no tax).
TDS is correctly deducted under 194C if it's a contractual arrangement. Your consultant is possibly mistaken if he claims TDS is not applicable at all unless you are only passing on pure reimbursement without any contractual obligation.
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