The Indian Premier League may be billed as a $1 billion brand but the government got peanuts by way of taxes as the finances of both Board of Control for Cricket in India (BCCI) and various franchises are obscured by puzzling revenue-income gaps and elaborate tax dodges.
BCCI filed returns to the Income Tax department showing “nil” income for 2008-09 and an income of Rs 14.86 crore for 2009-10. Yet, gross revenues earned by the Board from IPL for assessment year 2009-10 works out to a significant Rs 661 crore.
Data provided by the revenue department to Parliament’s standing committee on finance showed that IPL franchises filed paltry sums as tax deducted at source for 2010-11. India Cements, owners of Chennai Super Kings, filed Rs 12.91 crore, Rajasthan Royal’s Jaipur Cricket Pvt Ltd Rs 4.53 crore, Deccan Chargers Rs 5.53 crore, King’s XI Punjab’s KPH Cricket Rs 4.25 crore, Kolkata Knight Riders Rs 5 crore, GMR’s Delhi Daredevil’s Rs 2.44 crore and Royal Challengers Rs 5.92 crore.
In its report due to be presented to Parliament, the committee, headed by former finance minister and BJP leader Yashwant Sinha, pointed to a sharp jump in losses after IPL-1, saying “loss of crores of rupees ranging from Rs 5 crore in case of Royal Challengers to more than Rs 87 crore in case of Deccan Chargers occurred during year 2009-10″.
Similarly, teams such as “Mumbai Indians, Chennai Super Kings and Deccan Chargers, which incurred zero losses during the year 2008-09, has come out with figure of hefty losses during the year 2009-10″. With teams being investigated for suspected hawala operations and round tripping, the committee has asked for tax assessments for BCCI-IPL and its franchisees be taken up on “priority” and finalized by the income-tax department in coordination with investigating agencies like Enforcement Directorate. The committee concluded that investments in most franchises were highly layered through intermediaries located in Mauritius, Bahamas and British Virgin Islands and said the scope of official investigations had been broadened to “include strong possibilities of money being having been moved illegally through the hawala channel”.