Govt approves Rs 45 cr income tax exemption to ICC World Cup

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New Delhi, Mar 31 : The government today approved income tax waiver of about Rs 45 crore to the International Cricket Council for the ongoing World Cup.
The decision to grant the exemption was taken at a meeting of the Cabinet, which was also attended by Agriculture Minister Sharad Pawar, currently the ICC President.
"The tax exemption will be on the income arising in India from the ICC World Cup 2011 to the subsidiaries of the ICC, only where the contractual obligation to bear the income tax liabilities is on these entities," Information and Broadcasting Minister Ambika Soni told reporters after the meeting.
The exemption, however, will not cover the revenues of the global cricket body from sponsorships and telecast rights, which account for 72 per cent its total income.
The financial implication will be Rs 45 crore approximately, she added.
According to Revenue Secretary Sunil Mitra, the total receipts of the ICC from the ongoing World Cup are Rs 1,476 crore, while the cost for organising the event is Rs 571 crore. The ICC''s revenue from the broadcast rights is estimated to be Rs 1,062 crore.
Asked if Pawar had batted in favour of the proposal during the meeting, Soni replied in the negative.
"There was no batting, no commentary. When he (Pawar) did not say anything the question of conflict of interest do not arise at all," she said.
It is, however, understood that some ministers questioned the need for granting the tax exemption to the cash rich ICC but they were told that the law provided for the same.
Sources said it was pointed out to those ministers that not granting an exemption would amount to violation of the law.
The income tax exemption was granted to the ongoing cricket World Cup as it qualified criteria specified under the amendment of the Income Tax Act, 1961, in 2005 in wake of ICC Championship Trophy 2006.
To avail of the tax exemption, it requires the event to be recognised by the global body governing the sport, besides participation of more two nations. Moreover, the specified income has to be notified by the government.
"This event met all three criteria," Mitra said, adding income earned from sponsorships and telecast rights were not given the exemption as "it will not benefit ICC but the service providers".