IPL makes losses, BCCI tells I-T Dept

[J P K]

The Board of Control for Cricket in India (BCCI) has told the Income-Tax Department that the Indian Premier League (IPL) is a loss-making venture. The I-T Department is seeking to recover tax from the BCCI fully for the assessment year 2008-09. Documents available with Business Line show that the first edition held in India made a profit but the second edition, played in South Africa, made a loss. The Board is yet to submit accounts for the 2010 and 2011 IPL editions to the I-T Department. IPL is a part of BCCI and has no separate legal entity. A committee constituted by the BCCI maintains a separate bank account, which is maintained by the treasurer of BCCI. BCCI-IPL earns money mainly from media rights, franchisee consideration, sponsorships, franchisee share transfer fees, and so on. There were eight franchisees during the first three editions, which rose to 10 this year. There were allegations that the I-T Department was not serious on recovering tax from IPL and the BCCI. This forced the Department to ask for detailed accounts to ascertain tax liability, if any, the tax officials said. The I-T Department gets revenue in the form of tax deducted at source (TDS) on payment to players, coach, umpires, commentators, event managers, besides other professionals. Scope for more tax But the Department thinks that there is scope to tax the surplus of IPL as a whole, said the sources. This is levied at the rate of 11.33 per cent. The Department earned revenues ranging between Rs 60 crore and Rs 400 crore by way of TDS in the four editions. The I-T Department is claiming more taxes from BCCI (see Tables). It withdrew the tax exemption enjoyed by BCCI with effect from June 1, 2006. Consequent to this, the Department has completed assessments for the assessment years 2007-08 and 2008-09, while that for 2009-10 is pending. The BCCI has reported that its gross revenue in the assessment years 2007-08 was Rs 651.82 crore, which rose to Rs 1,666.84 crore in assessment year 2010-11. http://www.thehindubusinessline.com/industry-and-economy/article2444902.ece