
BCCI got Rs.2,168 crore government tax relief from 1997 to 2007
EXCLUSIVE
By Qaiser Mohammad Ali in New Delhi
THE Indian cricket board harps on one particular point while defying the government on various issues: it doesn’t take financial assistance. That’s far from truth, as official figures show that it has received huge tax exemption over the years.
The Board of Control for Cricket in India ( BCCI) got tax exemption worth Rs.2,168 crore in 10 years, from 1997- 98 to 2006- 07, according to a document furnished by the assistant commissioner of income tax ( Mumbai) to Rajya Sabha last month.
Then, after the BCCI changed its objects and memorandum in 2009 to sponsor athletes of other sports, the department withdrew the exemption as this contribution is also charitable as per the Central Board of Direct Taxes circular of 1984.
The income tax department slapped a tax demand of Rs.375.15 crore on the BCCI income for two financial years — 2007- 08 and 2008- 09 — as per the document.
The figures were disclosed under Section 18 of the RTI Act and as part of a reply to a complaint filed by RTI activists Subhash Chandra Agrawal and Alok Varshney from the Capital. By disclosing these figures the sports ministry has tried to prove that the BCCI does receive indirect funding from the government in terms of exemption on the income, besides the entertainment tax exemption, customs exemption, discounted land for building stadiums, and police provisions during international and domestic matches etc.
The ministry, while giving its opinion to the Central Information Commission on whether or not the BCCI was a ‘ public authority’, said that it should be classified as a national sports federation as it also uses one of the national emblems (‘ India’), which means that it’s ‘ under govt patronage’. Also, the BCCI has been importing expensive ground/ pitch equipment from Australia, England and other countries and for that it gets heavy customs exemption.
The income tax exemption — which the BCCI enjoyed u/s 12A of the Income Tax Act before changing its objective on June 1, 2006, and thus losing that privilege — is huge. According to the document, the between 1997- 98 and 2006- 07 was in 1998- 99 when the figure touched Rs.1,818.20 crore.
In 2006- 07, the financial year during which the Sharad Pawar- headed BCCI changed its objective, it got the exemption worth Rs.127.51 crore.
In the 2007- 08 financial year, when the department started imposing tax on BCCI’s income, the Board’s income was assessed at Rs.274.86 crore and a tax demand of Rs.118.03 crore was raised, as per the document. And in 2008- 09, the BCCI’s income was Rs.608.30 crore and the tax demand was Rs.257.12 crore. Will the tax department ever be able to force the BCCI to pay up?
(This story first appeared in Mail Today newspaper in New Delhi, on Dec 24, 2011)