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India’s hosting rights for 2021 T20 WC in jeopardy over tax exemptions

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The Board of Control for Cricket in India (BCCI), the International Cricket Council (ICC), and the Government of India are at loggerheads over tax exemption issues at the international cricketing authority has served up last warning to the BCCI regarding obtaining a full tax exemption certificate for the world event. 

The BCCI, if not granted full tax exemption by the Finance Ministry of Government of India, would have to pay 906 crores in taxes for hosting the T20 World Cup in the nation this year. However, a partial exemption could cut down the money to Rs 227 crore tax. AndIf the Indian board wishes not to pay the tax money, it would have to forgo the chances of hosting the tournament as ICC has kept UAE as a backup venue. 

The matter was discussed at the 24th AGM of the BCCI held recently. One member who attended the AGM told IANS on conditions of anonymity that the issue was discussed at length and most members were in favour of hosting the tournament even if it meant paying the taxes. The BCCI has sent an application for text exemption to the Indian govt. but hadn't really had any reply from them as it has missed the 2019 and 2020 deadlines of the ICC.

"The matter was discussed for 10 to 15 minutes, after which the house authorized the BCCI office-bearers to deal with the issue. But what was evident was that all the office-bearers were not on the same page vis-a-vis the question of whether the BCCI should forgo the hosting rights if the government doesn't grant full tax exemption. Some members said it was a matter of prestige - izzat ka sawal hai -- that India should pay the tax and host the World Cup if it comes to that," the official told IANS.

The matter is of grave importance as ICC has withheld $23.75 million from the share that the BCCI was entitled to receive from the 2016 T20 World Cup as the Indian board was unable to procure a full tax exemption from the Union Government and had got only 10% exemption from Modi govt. 

Experts believe that it would therefore not be easy for the board to get full tax exemption this time around too. Although in 2011, the Manmohan Singh govt. Had given a full exemption to the World Cup. 

"So, the question is simple: If the government had not given full tax exemption in 2016, how can it give it for the 2021 World Cup? And, if it grants a full exemption for 2021, it will have to, by the same token, give a full exemption for the 2016 tournament retrospectively," said one expert.

The ICC and the host country usually sign an agreement in which the host country has to get a full tax exemption certificate from the government which is mainly for the broadcasters as in that way the broadcaster’s taxes are saved and it is able to pay the full amount to ICC. But this did not happen in 2016 and in the case of 2021 too, the conditions seem similar to the same govt. is in power.

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