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BCCI objects to ST department’s Rs 536 crore tax demand

MUMBAI: The Service Tax (ST) department has issued 19 show-cause notices to the Board of Control for Cricket in India (BCCI) over a 10-year period demanding Rs 536 crore (Rs 5.36 billion) as taxes on the cricket board’s earnings from royalty and media rights.

According to BCCI treasurer Aniruddh Chaudhary’s account in the 2013–14 annual report, the BCCI has been receiving show-cause-cum-demand notices from the tax authorities since FY 2004–05 until 2012–13, and the exact amount accrued is Rs 536.13 crore.

In the report, Chaudhary has said that the BCCI had contested the department’s claims and filed an appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT) at the end of FY 2013. The matter is still pending before the CESTAT.

The cricket board’s contention is that the tax burden increases as the ST is categorising the royalty and media rights income under the Intellectual Property Services. The ST department has demanded Rs 39.21 crore (2006–07), Rs 80.51 crore (2007–08), Rs 54.54 crore (2008–09), Rs 85.16 (2009–10) and Rs 65.79 cr (2010–11) on media rights sale.

The BCCI has also decided to challenge the ST department’s decision to demand tax on players’ fees, franchise fees, players’ transfer fees, franchisee licence incomes, etc. In some cases, media rights income has been clubbed under ‘franchisee services’ category.