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IPL teams get a service tax jolt

Tuesday, 13 November 2012 - 8:00am IST | Place: Mumbai | Agency: DNA
Sandwiched as IPL teams are between the hard-nosed policies of the government and the Board of Control for Cricket in India (BCCI), an escape route is not easy to find.

IPL teams nowadays are an aggrieved lot. Worse, they don’t seem to get a shoulder to lean upon. Sandwiched as they are between the hard-nosed policies of the government and the Board of Control for Cricket in India (BCCI), an escape route is not easy to find.

The latest shock for the teams is the hefty service-tax demand notes that they have been slapped with by the Union finance ministry. The development has brought the teams together and the buzz is that the franchises have agreed to address the issue unitedly. They have even prepared a plan to achieve this.

Each team has been asked to cough up close to Rs20 crore by the revenue department. What’s more, this is apparently a retrospective demand. After keeping mum for five years, the government has suddenly woken up to demand service tax from the teams from the first year onwards. The estimated amount for each team is close to Rs4 crore per annum. The explanation the teams have received is that they must pay the tax for the payments they are making to their players.

Stung by the notes, the teams have written to the BCCI urging the board to resolve the crisis. They have also decided to appeal against the demand. “It is not that we will pay the amount immediately,” said an official from one of the franchises. “We will go in for appeal, but we also want to bring the BCCI on board.”

The teams argue that they are entitled to a refund of the service tax from the BCCI as they, too, are rendering a service to the board. “If the board pays us, that will offset our dues to the government,” said the official quoted earlier.

The BCCI, however, is in no mood to oblige. It has convened a meeting of its working committee on November 21 to decide its policy in the matter.

“How can we re-open the account books of the last five years?” said a board official. “The franchises can make any demand, but that does not mean we have to agree.”

The official admitted, however, that the service tax demand was a new development and the board would have to address the issue “with finality”.

The official also confirmed receipt of the letters sent by the franchises. “Five franchises have written to us and they have every right to do so. But the board will go by its policies and constitution,” the official said.


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