The Goa Government has recently intensified its enforcement measures against GST evasion in the events industry. As per a directive issued on March 10 by the State Tax Commissioner, venue owners and property operators are now made directly liable for GST compliance of event organisers operating from their premises.

The order mandates that even unregistered property owners must intimate the authorities at least three days prior to any event. Further, they are required to verify the organiser’s PAN and GST registration status. In case of non-compliance, the consequences are severe—ranging from deemed liability for the entire event turnover to penal provisions, including imprisonment.

While this directive is currently limited to Goa, it raises a broader question: Is this a necessary compliance safeguard, or an additional compliance burden being shifted onto unrelated parties?

Enforcement or Overreach?

From a policy perspective, the intent to curb tax evasion—particularly by transient or out-of-state event organisers—is understandable. However, shifting primary tax responsibility onto venue owners introduces a significant compliance burden on businesses that are not directly supplying taxable services.

This approach appears to stretch the conventional framework of GST, where liability is typically linked to the supplier of goods or services. The move may also create practical challenges for property owners who lack the expertise or infrastructure to validate GST compliance of third parties.

What Exactly Has Changed?

The directive covers a wide spectrum of events such as concerts, exhibitions, trade fairs, fashion shows, sports events, and similar short-duration activities. The key requirements imposed on venue owners include:

  • Mandatory prior intimation (at least 3 days before the event)

  • Collection and verification of organiser’s PAN

  • Ensuring the organiser holds a valid GSTIN in Goa

  • Monitoring compliance of suppliers involved in the event

Failure to comply triggers a legal fiction wherein:

Technical Analysis under GST Framework

This directive appears to derive its foundation from enforcement powers available to state authorities under the GST law. However, certain aspects merit closer scrutiny:

1. Casual Taxable Person (CTP) Requirement

Under Section 24 of the CGST Act, persons making taxable supplies without a fixed place of business in a state are required to obtain registration as a Casual Taxable Person (CTP). The directive attempts to enforce this provision indirectly through venue owners.

2. Deemed Supply Mechanism

The provision deeming supplies to be made by the property owner raises concerns. GST law does not ordinarily permit shifting of tax liability unless specifically provided (e.g., reverse charge under Section 9(3)/(4)).

3. Third-Party Compliance Burden

Requiring venue owners to verify GST registration and compliance status of organisers goes beyond standard due diligence expectations and may lack clear statutory backing.

4. Risk of Overreach

The imposition of liability on a non-supplier could be challenged on grounds of lack of legislative sanction and violation of basic GST principles, particularly the concept of supply under Section 7.

Practical Implications for Businesses

  • Increased compliance costs for venue operators, including documentation and verification processes

  • Heightened litigation risk due to ambiguous liability provisions

  • Operational friction in hosting events, especially with out-of-state organisers

  • Potential deterrence for event-based economic activity in the state

Conclusion

While Goa’s directive reflects a proactive stance against GST evasion, the mechanism adopted raises important legal and practical concerns. The burden placed on property owners may not align seamlessly with the foundational principles of GST.

If replicated across other states, such measures could significantly alter the compliance landscape for event-driven industries. A more balanced approach—perhaps through stricter enforcement against organisers themselves or streamlined CTP registration—may achieve the intended objective without disproportionately impacting ancillary stakeholders.