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Will India host ICC T20 World Cup 2021? Know BCCI predicament with Rs 906 crore tax issue

ICC T20 World Cup 2021 | BCCI faces 'taxing' time, may force to pay up to Rs 906 crore. This may affect India's chances to host the global event unless the Central Government relents in time.

Will India host ICC T20 World Cup 2021? BCCI tax tussle story

Mumbai, January 4: The BCCI could end up paying up to a massive Rs 906 crore tax if the Union government declines to grant full tax exemption for staging the ICC T20 World Cup in the country later this year. Even if the government grants partial exemption, the board will have to pay at least Rs 227 crore tax, if it wants to host the tournament.

With the World Cup just 10 months away, the International Cricket Council (ICC) has earmarked the United Arab Emirates (UAE) as a backup venue to host the seventh edition of the tournament.

The BCCI has already missed a couple of deadlines -- December 31, 2019, and December 31, 2020 -- and now the pressure mounts on it to decide quickly if it wants to host the prestigious tournament.

An official said the new and revised deadline is in February. An application of the BCCI, seeking full tax exemption for the 2021 T20 World Cup, is lying with the union finance ministry for a long time, but the Narendra Modi-led government is yet to take a final decision on the request.

Interestingly, the BCCI is not even a recognised national sports federation by the sports ministry. Now, the ICC has given two options -- seemingly the final ones -- to the BCCI. They are: the T20 World Cup is relocated to the United Arab Emirates (UAE), and other is that it provides an undertaking that if it fails to get the exemption then it will have to meet the tax liabilities, which could be a minimum of Rs 226.58 crore and a high of Rs 906.33 crore.

The BCCI's application for tax exemption is lingering despite it being well connected with the union government. Secretary Jay Shah is the son of Home Minister Amit Shah and treasurer Arun Singh Dhumal is younger brother of Anurag Thakur, Minister of State for Finance and Corporate Affairs. And it is the finance ministry that will take the final decision on tax exemption.

In 2011 as well, when 50-over World Cup was held in India, the Manmohan Singh-led government sat on the application from the BCCI, before the then Prime Minister himself intervened and granted it at the last minute.

But for the 2016 T20 World Cup, staged in India, the Modi government had granted only 10 per cent tax exemption and not full. And because the government had not granted full tax exemption, the ICC has withheld $23.75 million from the share that the BCCI was entitled to receive from the game's world governing body. This issue, the BCCI insists, is still alive and unresolved.

At the December 24 AGM, the BCCI office-bearers discussed this issue with the general body that comprises its affiliated state associations. But, according to an official who attended the meeting in Ahmedabad, the house looked divided over whether the world's wealthiest cricket board should pay the tax, if the government doesn't grant full tax exemption.

Just a day before the AGM, members of BCCI's affiliates were handed a two-page note as part of agenda item numbers Q - 'to update on ICC matters' -- and 'S' - 'to update on ICC T20 World Cup 2021 scheduled to be held in India. "I don't think anyone had the time to read the note or grasp the enormity of the issue as everyone was preoccupied with a friendly cricket match, played on the eve of the AGM among the representatives of the BCCI affiliates, followed by the dinner," an official told IANS.

If the government eventually declines, the decision may affect BCCI's chances of hosting the 50-over World Cup in 2023, already allotted to India, as well. Experts say that if the government declined exemption for the 2021 T20 World Cup, it was unlikely that it would change its mind for the 2023 World Cup, which will also require full tax exemption.

Therefore, they say, the tax exemption issue of the 2021 T20 World Cup is closely linked with the 2016 T20 World Cup as the same government that gave only 10 per cent exemption in 2016 is in power even today.

The tax issue has arisen because the ICC's media rights holder, STAR India, is based in India and the broadcaster pays ICC the money. If the Indian government doesn't grant tax exemption to STAR India, the premier broadcaster will not pay the entire amount promised to the ICC. And if the ICC doesn't receive the entire amount from STAR India, the member countries of the ICC will receive less as their share from the world body's distributions.

Story first published: Monday, January 4, 2021, 11:59 [IST]
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