By Qaiser Mohammad Ali
New Delhi, Jan 14 (IANS) The cash-rich Indian cricket board should pay taxes, and not seek exemption from the central government, and host the T20 World Cup in India this year, says former treasurer Kishore Rungta.
According to a document of the Board of Control for Cricket in India (BCCI), if the government gives only 10 per cent exemption, it would have to pay $31 million (around Rs.226.58 crore) and if the government rejects exemption completely, then it will have to pay $124 million (around Rs.906.33 crore) — provided it is willing to pay the tax from its account and host the prestigious World Cup.
The International Cricket Council (ICC) has put two conditions to the BCCI to get full tax exemption for the T20 World Cup, tentatively scheduled to be staged in October-November. If it doesn’t get the exemption, the tournament would be relocated to the United Arab Emirates, the ICC has told India. The BCCI has missed a few deadlines set by the ICC, and the next deadline, which looks like the final one, is next month.
“Sports bodies have been exempted from payment of taxes. I don’t know if the BCCI is paying taxes at present. But if it is paying taxes in the normal course, about which I am not aware, then it should pay the tax in this case and host the T20 World Cup,” Rungta, who was BCCI treasurer from 1998 to 2003, told IANS.
“Still, the BCCI should try and take the exemption so that the tax is not paid on the entire body structure because that will be colossal and India will not gain anything except that cricket will be held here. So, I for one, would be of the opinion that irrespective of the tax issue, we should hold the tournament in India,” said the Jaipur-based business tycoon.
A BCCI application for tax exemption is lying with the government for long, but no concrete word of assurance has come so far. The BCCI has now asked its secretary Jay Shah, son of Union Home Minister Amit Shah, and treasurer Arun Singh Dhumal, younger brother of Anurag Thakur, the Minister of State for Finance and Corporate Affairs, to liaise with the government on the issue. Interestingly, it is the finance ministry that will take the final decision on tax exemption.
Meanwhile, the BCCI will discuss the T20 Wold Cup tax issue again at an apex council meeting on Sunday.
Rungta said the BCCI is a rich organisation and should pay the taxes, if required. According to the BCCI’s latest balance sheet finalised, 2018-19, its net worth is a colossal Rs.14,489.80 crore.
“The BCCI has a lot of money in the corpus that is dirtying away – I mean, rotting away in banks – and there is no utility [of it]. It is not being used for the right causes or purposes. When you are gaining Rs.3,000 crore to Rs.4,000 crore every year, why should you not be spending money left, right, and centre on development of cricket, particularly on starting schools and colleges where cricket is the focus? They should spend a lot of money on such activities,” said Rungta, also a former secretary of the Rajasthan Cricket Association.
On the issue of tax exemption, the ICC has given the BCCI two options to tell it finally by next month if it will be in a position to host the T20 World Cup. These conditions are: if full tax exemption is not secured, and the BCCI declines to pay the taxes from its account, the tournament will be relocated to the UAE; and, the BCCI provides an undertaking to the ICC that in case it fails to get full exemption then it will have to meet the tax liabilities, which could be a minimum of Rs.226.58 crore (in case of partial exemption) and a high of Rs.906.33 crore (in case of no exemption).
In 2011, when a 50-over World Cup was held in India, the government sat on the application from the BCCI for inordinately long, before the then Prime Minister Manmohan Singh himself intervened and granted it at the last minute.
But for the 2016 T20 World Cup, staged in India, the Narendra Modi government had granted only 10 per cent tax exemption and not full. And because the government had not granted full tax exemption, the ICC has withheld $23.75 million from the share that BCCI was entitled to receive from the game’s world governing body. This issue, the BCCI insists, is still alive and unresolved.
Rungta, who was close to the powerful late BCCI secretary/president Jagmohan Dalmiya, had closely followed how the government of the day handled the BCCI’s tax exemption application for the 1996 World Cup, held jointly in India, Pakistan, and Sri Lanka.
“I dealt with the outgoing treasurer’s [SK Nair, 1993 to 1998] matter and the BCCI got exemption from the government for the 1996 World Cup. It entirely depends on the government of the day if they want to give exemption or not. In fact, when I was treasurer, Mr N. Srinivasan was always of the opinion that the BCCI should not seek tax exemption; he has been very vocal on this in meetings, and that we should be paying the taxes in the normal course as well,” claimed Rungta.
“I don’t know if the BCCI is paying taxes at the moment or not, but earlier we had an exemption by way of a letter where [it was said that] the sports bodies were exempted from paying taxes. So, we took advantage of that. And after that Mr Srinivasan said why we should go to the government and let us, from our revenue, start paying taxes. But I don’t know what happened subsequently. He voiced this opinion when I was treasurer,” he said.