Tax war between ICC and BCCI
The international governing body of cricket is mulling over reducing the annual revenue it will transfer to the BCCI as it still continues to find possibilities to restore money it lost as a result of the tax paid during the 2016 World T20 tournament which was staged in India.
It should be learnt that the 10% tax paid by the ICC to Indian tax authorities led to a total revenue loss of $20-30 million. The minutes of a Committee of Administrators (CoA) meeting that happened on July 6 describes that while these events were earlier exempted from tax, the Indian government’s opinion changed in 2016, which forced India’s governing body to hold back 10% of the amount payable by the broadcaster, Star Sports, to the International Cricket Council.
In early 2018, it turned out to be a problem for India as it was in danger of losing out on hosting the iconic 2021 Champions Trophy (since replaced by the T20I World Cup) including the 2023 ODI World Cup. It was also learnt that the ICC management directed to seek alternative venues just in case if the problem was not sorted out.
“The Board agreed that ICC management, supported by the BCCI will continue the dialogue with the Indian Government but in the meantime directed ICC management to explore alternative host countries in a similar time zone for the ICC Champions Trophy 2021,” the ICC had said in a release on February 2018.
The minutes of the Committee of Administrators (CoA) meeting which was held on July 6 added that India’s governing body BCCI made every possible attempt with the government in order to try and ensure a tax exemption but 3 years on, the tax authorities have still not their mind. In the last decade itself, the Indian government permitted tax exemptions for the 2006 Champions Trophy including the 2011 World Cup.
As for the 2006 event, Ehsan Mani and the late Jagmohan Dalmiya had negotiated an exemption with the Indian government. On the basis of that negotiation only, the government moved a legislation in the appropriate act, which permitted international sporting competitions to be exempted. This act applied only recently as 2017 when the FIFA Under-17 World Cup got a tax break for broadcast equipment which was imported by FIFA’s host broadcasters.
India’s governing body BCCI will now seek the standpoint of an English law firm regarding their legal options since the 2016 event deal between the BCCI and the international governing body ICC was governed by English law.