New Delhi
The money-wealthy Indian cricket board could finish up paying up to a enormous Rs 906 crore tax if the Union government declines to grant complete tax exemption for staging the ICC T20 World Cup in the nation this year. Even if the government grants partial exemption, the board will have to spend at least Rs 227 crore tax, if it desires to host the tournament.
With the World Cup just 10 months away, the International Cricket Council (ICC) has earmarked the United Arab Emirates (UAE) as a backup venue to host the seventh edition of the tournament. The Board of Control for Cricket in India (BCCI) has currently missed a couple of deadlines, December 31, 2019, and December 31, 2020, and now the stress mounts on it to choose immediately if it desires to host the prestigious tournament. An official mentioned that the new and revised deadline is in February.
An application of the BCCI, looking for complete tax exemption for the 2021 T20 World Cup, is lying with the union finance ministry for a extended time, but the Narendra Modi-led government is but to take a final choice on the request.
Interestingly, the BCCI is not even a recognised national sports federation by the sports ministry.
The BCCI has missed a couple of deadlines, set by the ICC, for securing complete tax exemption. Now, the ICC has provided two alternatives, seemingly the final ones, to the BCCI.
They are: The T20 World Cup is relocated to the United Arab Emirates (UAE), and other is that it supplies an undertaking that if it fails to get the exemption then it will have to meet the tax liabilities, which could be a minimum of Rs 226.58 crore and a higher of Rs 906.33 crore.
The BCCI’s application for tax exemption is lingering in spite of it becoming nicely connected with the union government. Secretary Jay Shah is the son of Home Minister Amit Shah and treasurer Arun Singh Dhumal is younger brother of Anurag Thakur, Minister of State for Finance and Corporate Affairs. And it is the finance ministry that will take the final choice on tax exemption.
In 2011 as nicely, when 50-more than World Cup was held in India, the Manmohan Singh-led government sat on the application from the BCCI for inordinately extended, ahead of the then Prime Minister himself intervened and granted it at the final minute.
But for the 2016 T20 World Cup, staged in India, the Modi government had granted only 10 per cent tax exemption and not complete. And mainly because the government had not granted complete tax exemption, the ICC has withheld $23.75 million from the share that the BCCI was entitled to acquire from the game’s planet governing body. This problem, the BCCI insists, is nevertheless alive and unresolved.
At the December 24 AGM, the BCCI workplace-bearers discussed this problem with the basic body that comprises its affiliated state associations. But, according to an official who attended the meeting in Ahmedabad, the property looked divided more than no matter if the world’s wealthiest cricket board should really spend the tax, if the government does not grant complete tax exemption.
“The matter was discussed for 10 to 15 minutes, after which the house authorised the BCCI office-bearers to deal with the issue. But what was evident was that all the office-bearers were not on the same page vis-a-vis the question of whether the BCCI should forego the hosting rights if the government doesn’t grant full tax exemption. Some members said it was a matter of prestige – izzat ka sawal hai — that India should pay the tax and host the World Cup, if it comes to that,” the official mentioned.
Just a day ahead of the AGM, members of BCCI’s affiliates had been handed a two-web page note as component of agenda item numbers Q – ‘to update on ICC matters’ — and ‘S’ – ‘to update on ICC T20 World Cup 2021 scheduled to be held in India’.
“I don’t think anyone had the time to read the note or grasp the enormity of the issue as everyone was preoccupied with a friendly cricket match, played on the eve of the AGM among the representatives of the BCCI affiliates, followed by the dinner,” he emphasised.
If the government sooner or later declines, the choice may well impact BCCI’s probabilities of hosting the 50-more than World Cup in 2023, currently allotted to India, as nicely. Experts say that if the government declined exemption for the 2021 T20 World Cup, it was unlikely that it would adjust its thoughts for the 2023 World Cup, which will also need complete tax exemption.
Therefore, they say, the tax exemption problem of the 2021 T20 World Cup is closely linked with the 2016 T20 World Cup as the exact same government that gave only 10 per cent exemption in 2016 is in energy even today.
“So, the question is simple: If the government had not given full tax exemption in 2016, how can it give it for 2021 World Cup? And, if it grants full exemption for 2021, it will have to, by the same token, give full exemption for the 2016 tournament retrospectively,” mentioned one particular professional.
Also, and substantially, argue authorities, that if the government grants tax exemption to cricket, it should really not deny comparable exemptions to other national sports federations as nicely, mainly because the government should really treat all sports bodies equally.
The tax problem has arisen mainly because the ICC’s media rights holder, STAR India, is primarily based in India and the broadcaster pays ICC the income. If the Indian government does not grant tax exemption to STAR India, the premier broadcaster will not spend the complete quantity promised to the ICC. And if the ICC does not acquire the complete quantity from STAR India, the member nations of the ICC will acquire much less as their share from the planet body’s distributions.
Separately, when the ICC allots its tournaments to its member nations, the two parties, ICC and tournament hosting nation, sign a host agreement that binds the host to safe complete tax exemption.
The ICC offers a particular quantity to the host nation whilst every single match staging association – in BCCI’s case, its affiliated state associations — gets a fixed sum for organising a match(es). The gate income that is accrued from hosting matches goes to the match hosting association. There are a lot of other circumstances in addition to this.
On July 6 final year, the Supreme Court-appointed Committee of Administrators (CoA), which was administering the BCCI at the time, had discussed the $23.75 million withheld by the ICC in a meeting. The CoA noted: “…since the agreement between the BCCI and the ICC in relation to the hosting of the ICC T20 World Cup 2016 is governed by English law, the opinion of an English firm should be obtained and the further course of action would be determined based on the said opinion”.
Three months just after that meeting, Sourav Ganguly took charge of the BCCI as president, Shah as secretary, and Dhumal as treasurer at the elections held on October 23. The problem of the revenue tax exemption for the 2021 T20 World Cup and the 50-more than World Cup in 2023 was currently on the table. But small forward movement appears to have been created because October final year.