ICC will deduct the taxed amount from BCCI's share of revenue in 2023.
The BCCI is reportedly set to lose INR 955 crores in revenue share from ICC, in case it fails to get the obligatory tax exemption from the Indian government for hosting the ODI World Cup in India in 2023. The showcase ICC event is set to be played in October-November.
As per ICC norms, the host nation is required to get tax exemption from the government for hosting tournaments organized by the global body. If the host nation doesn’t provide any tax exemption, then the amount taxed on ICC broadcasters is deducted from its share of the revenue for that year.
However, the Indian tax rules do not provide any such exemptions, as BCCI previously lost close to ₹193 crores (USD 23.5 million) in revenue share from ICC in 2016 as the government didn't exempt tax surcharge for hosting the 2016 ICC T20 World Cup. The BCCI is still fighting that case in the ICC tribunal.
"The next ICC major men's event, which is the ICC Cricket World Cup 2023, is scheduled to be held in India in the month of October & November in 2023. The BCCI was obligated to deliver a tax exemption or a tax solution to the ICC for this event, latest by April 2022," stated the report circulated among state units ahead of the Board's October 18 AGM in Mumbai.
Travel to Pakistan for Asia Cup in 2023 on agenda of BCCI’s Annual General Meeting (AGM)
"This time line was further extended by the ICC Board till 31st May 2022. At the start of this financial year, the BCCI had advised the ICC that in line with the tax order for the 2016 event, it was expected that a 10% (excluding surcharges) tax order could be obtained as an interim measure for the 2023 event within the required time frame. The ICC has now received a 20% (excluding surcharges) tax order for its broadcast revenue for the 2023 event from the tax authorities in India,” the report stated further.
If the Indian government levies that full 21.84% tax excluding the surcharges, the adverse impact on the Board's revenue from the ICC would be USD 116.47 million. It is understood that the BCCI is still trying to negotiate and bring down the tax surcharge percentage to 10.92 percent from the existing demand of 21.84%.
"The BCCI is currently working with the Ministry of Finance, Government of India and have represented against this 20% (excluding surcharges) tax order at the very highest level and are hopeful that a 10% (excluding surcharges) tax order would be forthcoming shortly,” the statement read.
"It is to be noted that any tax cost incurred by the ICC for the 2023 event in India will be adjusted with the BCCI's share of revenue from the ICC," the report further stated.
The BCCI's share from the ICC's central revenue pool for the tenure 2016 to 2023 is USD 405 million (INR 3336 crore approximately). The ICC is expecting USD 533.29 million (INR 4400 crores approx) from the broadcasting revenue of the 2023 event in India.
(PTI inputs)