BCCI working to get tax relief for players on ICC prize money

The cricket board will also push the world body, ICC, to bear the shortfall due to non-exemption of tax for events hosted by India

The gloomy English weather could possibly mean Virat Kohli’s men have to share the $1.6 million ICC prize money with New Zealand as joint winners of the World Test Championship. But there’s also some bright news for the Indian players. The Indian board (BCCI) has written to the Central Board of Direct Taxes (CBDT) to provide tax (TDS) relief to the players for the income arising out of competing in an International Cricket Council event overseas.

BCCI’s late disbursement of prize money ($5,00,000) to the Harmanpreet Kaur-led team that finished runners-up in the World Cup had recently made news. (Reuters)

“Talks with tax authorities have been positive and things will soon be in place so that the cricketers don’t have to suffer from dual taxation,” a BCCI official said. “This would not only benefit the men but also India’s women’s team that did so well in the 2020 T20 World Cup in Australia.”

BCCI’s late disbursement of prize money ($5,00,000) to the Harmanpreet Kaur-led team that finished runners-up in the World Cup had recently made news. Board officials say their talks to sort out the taxation issue was one of the reasons for the delay.

Kaur and her team mates have been distributed the prize money after accounting for tax from ICC’s payment. “If Shafali Verma comes under 20 % tax slab for example, she would be getting refund for the 20% additional tax she would have to pay under ‘further income’,” the official said.

This tax resolution will have no bearing on BCCI’s pending income tax issues with the government where it continues to pay taxes under protest”. As per the last financial note shared with its members, BCCI has until 2019 paid income tax of over Rs. 5,000 crore under protest. The government has withdrawn income tax exemptions to BCCI from 2009.

BCCI WANTS ICC TO BEAR TAX SHORTFALL

On the tax dispute with ICC, the Indian board plans to harden its stand in discussions with the world body. ICC will soon hit the market to sell its newly announced world event-a-year bouquet (T20 WC, ODI WC, Champions Trophy) for the 2024-31 phase and BCCI wants to leverage its clout to settle the issue.

ICC puts the onus on host members to secure tax exemptions for global events and its 2016 T20 World Cup tax issue ($23.7mn) with BCCI has gone to the Dispute Resolution Committee. BCCI stands to lose over Rs. 900 crore from the upcoming T20 World Cup due to the absence of tax exemption, and over Rs. 225 crore in case of a partial exemption.

With the government in no hurry to ease its tax norm, BCCI wants to convince the ICC Board to cover the tax shortfall under ICC event costs.

“When Cricket Australia or Cricket West Indies host an ICC event, compare the costs involved with those when India plays host. The costs go up by 20 to 30 %,” another BCCI official said. “Take the case of the 2021 T20 World Cup in India and the 2022 T20 World Cup in Australia, where CA are allotted over 30 % more as host fees because of increased costs due to air travel, accommodation and other expenses. From our point of view, if hosting an event in India is cost effective, ICC should not continue to be rigid in their position on tax matters.”

The matter was discussed in BCCI’s apex council meeting on Sunday, and will be put forward to ICC. BCCI gears up to host three ICC events, a T20 WC, ODI WC and Champions trophy, in the next cycle. With the 2023 ODI WC to follow the T20 event, BCCI wants to use ICC’s latest round of media rights sale to its advantage.

“It’s not a case of any bargain tactics. Our position is backed by facts. The $2 billion rights value for the ICC in the last cycle was a result of the overall proposition that three of those events will be staged in India. It will be no different in future. We are directly and indirectly contributing 80 % to the ICC revenue.”