BCCI IN A FIX OVER SERVICE TAX
Undecided if it will pay the 12.36% tax on behalf
of cricketers & other professionals who render services
By Qaiser Mohammad Ali in New Delhi
March 31: WITH only three days left for the
money-spinning Indian Premier League (IPL) to begin, the Indian cricket Board
said that it was still undecided on paying the 12.36 per cent service
tax in addition to the match fee of players.
IPL is one of the biggest sources of income
for players as well as the Board of Control for Cricket in India ( BCCI), the richest cricket body in the world.
On March 29, BCCI service tax
consultants held a workshop for north and central zone state associations at
the Ferozeshah Kotla here in New Delhi, but BCCI treasurer Ajay Shirke said that
the Board was still undecided on whether to pay the
service tax on behalf of players’ match fee and their share of annual BCCI
profit.
Ideally — and as per normal practice — the
BCCI should be paying service tax on behalf of cricketers, besides the match
fee, much like consumers pay excise duty and VAT etc. in addition to the cost
of any product.
The service tax for sportspersons came into
effect on July 1 last year. Shirke emphasised that the BCCI would indeed abide
by the law of the land. “The Board is yet to decide if it will pay the Service
Tax amount of players. We are still considering that. But whatever taxes are
due to the government will be paid by the Board,” Shirke told MAIL TODAY.
“For paying the service tax, players will
first have to be registered with the relevant tax authorities [department of
revenue of the ministry of finance],” said Shirke, who is also president of the
Maharashtra Cricket Association.
All professionals earning more than Rs.10 lakh annually will have to pay service tax.
The BCCI itself has been paying service
tax. As per its records, the Board, as on March 31, 2012, accounted for Rs.25.30
crore as service tax on input services it had received.
And as on March 31,
2011, it was Rs.7.69 crore.
The BCCI shares with players 26 per cent of
its total profit every year. For the year ending March 31, 2012, the Board
shared Rs.47.49 crore of its profit with the players.
Besides, BCCI pays players for representing
India as well as their state teams that compete in various domestic
tournaments. During a home series, a player gets Rs.7 lakh for a five- day Test
match, Rs.4 lakh for an ODI, and Rs.2 lakh for a Twenty20 International. For
overseas tours, players are paid a lump sum amount. A player appearing for his
state gets Rs.10,000 per match day.
The Board also awards central contracts to
top players on an annual basis. A total of 37 players given contracts in
October last year in Grade A ( 9 players are getting Rs.1 crore each), Grade B
(8 are getting Rs.50 lakh each) and Grade C (20 are getting Rs.25 lakh each).
Asked if the BCCI would facilitate players
in filing Service Tax, Shirke said: “If players seek out our help, we will help
them.”
Pratik Jain, partner, KPMG (Service Tax),
said that players’ salaries that they receive from companies (not BCCI) would
not be levied service tax. “Any income which is not a salary or is not towards
sale of a product, service tax will be levied on it,” Jain told MAIL TODAY.
After being extended a few times following
representations to the government, the deadline for paying service tax for the
first quarter — July to September 2012 — was extended and now it has been set
as April 25.
Before last year, service tax was
applicable on only those services that were specified under the Finance Act
1994. Services by sportspersons were not a specified service, so didn’t have to
pay this tax. Last year, the government replaced the ‘positive list’ with a ‘negative
list’ to remove confusion.
(This story first appeared in Mail Today,
New Delhi/Chandigarh)
