BookMyShow Wins Major Tax Relief: CESTAT Rules It Only Facilitates Ticketing, Not Trading
Tribunal says BookMyShow acts as booking agent, not trader of tickets
Ruling clarifies service tax liability and protects digital platforms
By Our Legal Reporter
New Delhi: December 04, 2025:
In a significant judgment, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, has ruled that BookMyShow, operated by Bigtree Entertainment Pvt. Ltd., is not engaged in trading cinema or event tickets. Instead, the company merely provides an online ticketing platform. This ruling has far-reaching implications for India’s digital economy, especially for online marketplaces and aggregators.
The tribunal upheld the Commissioner’s decision to drop demands raised against BookMyShow, stating that the company’s role is limited to facilitating ticket sales and charging a convenience fee. It does not hold rights over ticket inventory, pricing, or admission.
Background of the Case
- Revenue authorities had argued that BookMyShow was engaged in trading tickets and therefore liable under Rule 6 of the CENVAT Credit Rules, 2004.
- The company countered that it only acts as a booking agent, collecting ticket prices on behalf of cinema houses and event organizers, and remitting the same after deducting its convenience fee.
- The tribunal examined agreements between BookMyShow and credit card companies, as well as its arrangements with cinema houses, before ruling in favor of the company.
Key Findings of the Tribunal
- No trading activity: BookMyShow does not buy or sell tickets; it only facilitates transactions.
- Convenience fee model: The company earns revenue through convenience fees charged to customers.
- No reversal of CENVAT credit: Since BookMyShow is not engaged in exempted services, no reversal of credit is required under Rule 6.
- No service tax liability: The tribunal also clarified that BookMyShow is not liable to pay service tax on transactions with credit card companies.
Why This Ruling Matters
- Digital platforms protected: The judgment sets a precedent for online intermediaries, clarifying that facilitation does not equal trading.
- Tax clarity: It provides much-needed clarity on how service tax laws apply to digital businesses.
- Encouragement for startups: By reducing tax burdens, the ruling encourages innovation in India’s growing digital economy.
- Consumer impact: Customers can continue enjoying seamless ticket booking without hidden tax costs.
Industry Reactions
Legal experts have welcomed the ruling, noting that it distinguishes between intermediary services and trading activities. This distinction is crucial for platforms like Zomato, Swiggy, MakeMyTrip, and Paytm, which operate on similar facilitation models.
Tax professionals believe the judgment will reduce litigation in the sector and provide a roadmap for compliance.
Broader Implications
- For aggregators: The ruling strengthens the case for platforms that act as intermediaries rather than traders.
- For regulators: It highlights the need for updated tax frameworks that reflect the realities of digital commerce.
- For consumers: The decision ensures transparency in pricing, as platforms are not burdened with additional tax liabilities.
Also Read: Preity Zinta Wins ₹10 Crore Tax Battle: ITAT Mumbai Flags Major Reassessment Flaw
Conclusion
The CESTAT ruling in favor of BookMyShow is a landmark decision in India’s digital economy. By recognizing the company’s role as a facilitator rather than a trader, the tribunal has provided clarity on tax obligations for online platforms. This judgment not only relieves BookMyShow of unwarranted tax demands but also sets a precedent for other digital businesses operating in India.
As India continues to embrace digital commerce, this ruling will serve as a guiding light for policymakers, businesses, and consumers alike.
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Also Read: Income Tax Department Cracks Down on Third-Party Credit Card Payments: Notices Issued Across India