The IPL mess July 15, 2010

No difference between IPL and BCCI - Revenue department

Cricinfo staff

The Indian revenue department has said the IPL is not a separate body from the BCCI, and therefore all financial transactions entered into in the name of the league are the ultimate responsibility of the board.

According to the Times of India, at a hearing held by the Parliamentary Standing Committee on Finance yesterday, revenue secretary Sunil Mitra told the committee that for tax purposes, the ministry considers the IPL a part of the BCCI, and not a distinct entity. The decision effectively makes the board liable if the government discovers any financial crimes committed by suspended IPL chairman Lalit Modi, who is already being investigated by the board for alleged financial irregularities.

The meeting, chaired by former finance minister Yashwant Sinha, was held to question senior bureaucrats over the delay in the investigation of the source of funds for IPL teams and alleged tax evasion by the BCCI and the franchises, with Sinha asking why "the agencies [had] failed to gather information on the source of funds used for bidding for franchises."

Aside from Mitra, the other officers present at the hearing were the heads of the Central Board of Excise and Customs (CBEC), the Central Board of Direct Taxes (CBDT) and the Enforcement Directorate (ED).

The government began investigating the IPL following the dispute between former Union minister Shashi Tharoor and Modi, which eventually led to Tharoor's resignation as Minister of State for External Affairs. Under India's tax laws, service tax is applicable to the franchise fees paid by the teams to the board, the payments made to IMG for managing the league, and the revenue generated by the franchises from the sale advertising space.