India news February 5, 2013

BCCI hit with massive tax bill


The BCCI has been hit with a Rs 2300 crore (approx $433m) notice from the income tax department and has asked its treasurer Ajay Shirke to suggest how to deal with the issue.

The BCCI working committee met in Chennai on Monday and discussed the matter in detail. President N Srinivasan explained to the working committee that the tax-related issues have compounded since the BCCI changed its objectives in 2006, Mail Today has reported.

Since the BCCI is registered as a charitable trust, it used to get various tax exemptions on the grounds of promoting cricket as a 'charitable activity'. But after the BCCI amended its objectives in June 2006, the government has started considering the BCCI to be earning income through 'commercial' means, it was explained to the working committee.

The bone of contention has been the income generated through sale of IPL franchises and through sale of broadcast rights for the Twenty20 league. While the BCCI claims it distributes a "major portion" of the income generated to its affiliated units (ie the state and regional associations), the tax authorities have been reportedly seeking taxes both from the parent body as well as affiliated units.

It was learnt that Shirke has been asked to chalk out the path ahead "within a fortnight" so that the BCCI can "sort out" all the impeding issues with the tax authorities.

Amol Karhadkar is a correspondent at ESPNcricinfo

Comments have now been closed for this article

  • ajith on February 8, 2013, 11:46 GMT

    I do not think anyone in BCCI will be losing sleep over this. After all, it is a CHARITABLE organisation.

  • jay on February 6, 2013, 18:48 GMT

    Not a big deal for BCCI. Just check your trouser pockets for some change before sending for laundry.

  • TR on February 6, 2013, 15:13 GMT

    The definition of "Charitable Org" in wiki: ***A charitable organization is a type of non-profit organization (NPO). It differs from other types of NPOs in that it centers on non-profit and philanthropic goals as well as social well-being (e.g. charitable, educational, religious, or other activities serving the public interest or common good).*** I wonder what "public interest / common good" BCCI does and what percentage of its income goes in that direction. Building stadiums and paying millions to players (esp to foreign players) and punishing players who played ICL etc come under charity? May be they do.

  • Rahul on February 6, 2013, 10:38 GMT

    It's high time BCCI becomes a corporation and subjects itself to greater scrutiny and transparency. The use of 'control' in it's name is anachronistic and it get's away in the name of a private enterprise/charitable body while billions in India support & follow the 'Indian' (not BCCI) cricket team.

  • abhijeet on February 6, 2013, 6:42 GMT

    Strictly Legally speaking, BCCI has a good case to be called a charitable trust even though in spirit it is nowhere close to it. I think govt should not tax the operations related to Indian, state level or grassroot cricket primarily because BCCI is most likely gonna win the case if it goes to court. Instead govt should ensure that BCCI does function like a charitable trust and spends its bucks strictly on cricket development in India. However IPL is a different bird altogether. It is a strictly "For Profit" entity and should be taxed under Entertainment category just like movies.

  • krishnan on February 6, 2013, 6:42 GMT

    Hope IT collects this amount from BCCI and Indian govt uses it for Indian citizen(Unlikely situation )

  • Agnihothra on February 6, 2013, 5:41 GMT

    BCCI is teeming with legal eagles and tax experts and chartered accountants.. they will come out of this without even a scratch....

  • Kapil on February 6, 2013, 5:19 GMT

    I really wish the entire set up is overhauled and we have a new body and a team is formed which can identify raw talent and develop bowlers which is the ultimate need of the hour.. We need to have at least 6-7 fast bowlers and 5 spinners who are good to play at the international level and we do not have any of those at present.. And the people/team should be neutral to avoid conflicts of interest

  • Graem on February 6, 2013, 3:09 GMT

    How many financial and legal professionals employed by the BCCI did not see this one coming?

  • C on February 6, 2013, 1:38 GMT

    BCCI charity may seem an oxymoron yet it is a sports body chartered to administer cricket in India and should be exempted from taxes. The question of IPL is tricky and no can deny the motive here is profit and it seems fair of the tax officials to demand BCCI coughs up. That BCCI distributes a major part of the IPL profits to various state bodies is immaterial. Some years back ICC moved their headquarters from London to Dubai for these same tax reasons. While BCCI cannot do that, they can certainly hive off IPL to a special purpose vehicle and protect the remaining income from the grubby hands of the tax officials.

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