By: K Shriniwas Rao
Last Updated: December 16, 2022, 13:30 IST
The Indian government may once again deny a tax exemption. (Reuters Photo)
Pakistan Cricket Board (PCB) chairman Ramiz Raja has blamed the International Cricket Council (ICC) for not doing “enough” to resolve issues with India and ensure that cricket ties between the two countries continue smoothly going forward.
“They are circumspect and not forthcoming,” Raja said of the ICC and their inability to act. This happens at a time when there’s enough talk already over whether, in 2023, India will tour Pakistan for the Asia Cup and whether Pakistan will tour India for the 50-over World Cup later in the year.
While the Asian Cricket Council (ACC) may take a call on the Asia Cup when the time comes, Raja must first ask the ICC if the world body is confident of hosting the 50-over World Cup in India next year as scheduled. The fact of the matter is that the 50-over World Cup, scheduled in India between October and November 2023, stands on as slippery a wicket as it can get right now.
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The ICC may soon be left with no choice but to move it out of the country if tax-related matters surrounding the tournament are not resolved at the earliest.
In 2016, the ICC managed to host the T20 World Cup in India after they received an interim tax benefit from the Indian tax authorities to hold 10.3% surcharge from India’s revenue share – which the BCCI is fighting a legal battle right now.
For the 2023 World Cup, the ICC managed to procure another such interim tax order, but may once again find a perturbed BCCI unhappy with the development.
The ICC has asked the Indian cricket board (BCCI) to get the required tax solutions from the government of India but the fact is, neither in 2016 did the Indian government agree to any exemptions and neither is there a confirmation (or an indication) that they might agree to exemptions this time either.
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It is the ICC’s stated policy to get the host nation to procure the required tax exemptions from their respective governments. In India’s case, be it 2016 – when the Supreme Court-appointed Committee of Administrators (COA) were running BCCI or now, or 2023 – when there’s an elected body in place, the cricket board has categorically informed the ICC that “nothing can be done in this regard” and the governing body is free to take the tournament out of India if it so pleases.
In 2016, the government had refused exemptions following which the BCCI had also lost close to Rs 190 crore (US$22m) – deducted by the ICC from India’s revenue share – as tax surcharge, a case that the BCCI has now taken up with the ICC tribunal.
Heading into 2023, while the government of India may once again deny a tax exemption, the ICC (read: members of the world governing body) and the BCCI may once again run into rough waters because the global body has already raised a tax bill of 21.84% from the broadcast revenues for the event that comes to around US$116m (a tax liability of close to Rs 900 crore).
“It’s BCCI’s money. If the ICC can’t settle this issue before the World Cup arrives, and end up deducting it from India’s revenue share from the ICC, even this will end up in a legal battle,” say those tracking developments.
The Indian government has not said anything on the matter yet, neither have they given any indication yet on how they perceive it. “What will the government tell its tax-paying citizens? That the only sport in this country that earns money will be exempt of taxes? How well will that sit? There’s no way the government will say anything on this,” they add.
On the other hand, if the ICC agrees to let go of the tax money coming from India, its other members may take a contrary stand going forward in the wake of a precedent being set.
What are the choices in front of the ICC now?
Either way, we’ve not heard the last on this yet.
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