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IPL shifting may cost tax loss of crores to government


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The shifting of the IPL cricket’s second season from India to South Africa on security concerns will mean a Rs 50 crore loss to the country’s hospitality and travel industry, reports Lalatendu Mishra. More... IPL’s flight leaves Indian hotels stranded Lalatendu Mishra, Hindustan Times Mumbai, March 26, 2009 First Published: 02:16 IST(26/3/2009) Last Updated: 02:17 IST(26/3/2009) The shifting of the Indian Premier League (IPL) cricket’s second season from India to South Africa on security concerns will mean a Rs 50 crore loss to the country’s hospitality and travel industry, already suffering from the impact of a worldwide economic slowdown, say industry experts. IPL boss Lalit Modi said 30,000 hotel rooms might will go vacant across Indian cities as a result of the shift and based on this fallout, hotels will forego revenues of Rs. 15 crore at Rs 5,000 per room during the 42 days of the IPL calendar, though it is not clear what kind of rooms need to be considered for such estimates. “This is an incremental loss to the industry. It is an opportunity lost,” said Shreenath Shastry national director (hospitality and leisure), at property consulting firm Knight Frank India. The loss is not just in hotels, but also in related activities like food, beverages and entertainment events. “Food and beverage services would have been enhanced at not only the restaurants but also banqueting. Additionally, services like travel companies that provide cars and coaches, and other suppliers could have benefited,” Devendra Bharma, executive vice-president, Oberoi group. “It is a loss to the country at a time of slowdown. But we can’t compromise on security. The loss is nothing as compared to cancellation of a sporting event like Commonwealth Games or Olympics,” said Ankur Bhatia, executive director, Bird Group, a travel consultancy group. “The loss is anybody’s guess but it is substantial. Apart from hotels, airlines have also suffered. All the sponsors and the franchisees could have spent a lot,” said Partho Chatterjee, director, Berggruen Hotels.

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IPL shifting may cost tax loss of crores to government With the shifting of second season of multi-million dollar IPL cricket tournament to South Africa, Govt may lose revenue as the law leaves room for not paying tax deduction on payments to foreign players for an event outside India. The exchequer collected Rs 91 crore TDS during the first season of IPL last year. More... IPL shifting may cost tax loss to government Press Trust Of India New Delhi, March 26, 2009 First Published: 18:15 IST(26/3/2009) Last Updated: 18:26 IST(26/3/2009) With the shifting of second season of multi-million dollar Indian Premier League cricket tournament to South Africa, government may lose revenue as the law leaves room for not paying tax deduction on payments to foreign players for an event outside India. Andrew Flintoff, Paul Collingwood and J P Duminy of England, Kevin Peterson of South Africa and Shaun Taint of Australia have been contracted by different IPL franchisees for a total of $4.7 million. Bulk of this amount is likely to be paid in the current season even though the agreement between the franchisees and the players is for three years, sources said. Officials admitted there is a 'grey area' in the income tax law with regard to payments to non-resident sportspersons or sports associations if an event is held outside the country. Section 194E of the Income Tax Act provides for deduction at source at the rate of 10 per cent before fee is paid to non-resident sportsperson. While it specifies that 'the income must have been earned by the sportsmen by way of participation in India in any game ...or sports", it does not deal with an eventuality of an event taking place outside the country. The IT officials are apprehensive that they may lose TDS in the current IPL season beginning April 18 in different South African cities. The exchequer collected Rs 91 crore TDS during the first season of IPL last year.

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