BCCI could lose Rs 955 crore if ICC does not get tax exemption from government to host 2023 World Cup

The BCCI could lose around Rs 955 billion (US$116 million) if the central government sticks to its decision to levy a 21.84 per cent surtax on ICC’s broadcasting revenue from the 2023 ODI World Cup, according to a board report.

India will host next year’s Over 50 Showpiece in October/November. Tax surcharge refers to “an additional charge, fee, or tax that is added to the cost of a good or service over and above the originally stated price.” A surcharge is often added to an existing tax and is not included in the stated price of the good or service. According to ICC norms, the host country must obtain a tax exemption from the government for hosting tournaments organized by the global organization.

With Indian tax regulations not allowing such exemptions, BCCI has already lost nearly Rs 193 crore (USD 23.5 million) as the government failed to exempt the surcharge for hosting the 2016 ICC T20 World Championship. The BCCI is still fighting this case before the ICC Tribunal.” The next major ICC men’s event, the ICC Cricket World Cup 2023, is scheduled to take place in India in October and November 2023. The BCCI was required to provide the ICC with a tax exemption or tax solution for this event no later than April 2022,” reads the report, which was distributed among government agencies ahead of the Board’s annual general meeting in Mumbai on Oct. 18.

“This timeline has been further extended by the ICC Board to May 31, 2022. At the beginning of this financial year, the BCCI informed the ICC that according to the tax ruling for the 2016 event, it is expected that the 10% (excl. surcharges) tax ruling will be obtained in a timely manner as an interim measure for the 2023 event.

“The ICC has now received a 20% tax ruling (excluding surcharges) from the tax authorities in India on its broadcasting revenues for the 2023 event.” According to the BCCI document shared with the government agencies, the adverse impact would be on the Board’s income from the ICC when paying a 21.84 percent tax would be $116.47 million.

It is understood that the BCCI is still trying to negotiate and lower the surcharge percentage from the existing requirement of 21.84 to 10.92 percent. If the BCCI can reduce the surcharge to 10.92 per cent, the lost revenue would amount to around Rs. 430 billion (US$52.23 million). “BCCI is currently working with the Treasury Department of the Government of India and has opposed this 20% tax ruling (without surcharges) at the highest level and hopes that a 10% tax ruling (without surcharges) will be issued shortly.

“It should be noted that any tax costs incurred by the ICC for the 2023 event in India will be adjusted with the BCCI’s share of the revenue from the ICC,” the report continues. The BCCI’s share of the ICC’s central revenue pool for the 2016-2023 term is US$405 million (approximately Rs.3.336 billion). The ICC expects USD 533.29 million (approx. Rs. 4400 billion) in broadcast revenue from the 2023 event in India.

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