World Cup 2023: Tax levy of 21 per cent leaves Stakeholders in a fix

With the World Cup in India just about 15 months away, the issue of taxation has come to the fore, and mitigating the revenue loss from the pinnacle event has fallen in the hands of the Board of Control for Cricket in India (BCCI).

A letter from the India’s Ministry of Finance seems to have gone recently to all concerned informing them that the tax levy on the 2023 World Cup will be 21 per cent, more than double of the cess collected from the last global event held in India, Twenty20 World Cup in 2016, leading to a debate on who will take the load of the new withholding tax. The World Cup will be held in India in October-November, 2023.

In 2016, it was 10 per cent and one may recall that Star Sports had held back $ 22.5 million from the tournament fee of $ 225 million and following the law of the land, the broadcaster had paid it to the Government of India towards TDS.

The BCCI then was headed by a Committee of Administrators (CoA) and it was a well-known fact that the International Cricket Council (ICC) under Shahsank Manohar had tried to recover that amount from the share of the BCCI. After the Jay Shah-led BCCI came to power in 2019, the decision had been contested.

In the midst of all this comes the new rate of taxation and the amount, this time, could be staggeringly more than $ 100 million as the broadcast fee of the 50-over World Cup is believed to be more than $ 500 million. Cricbuzz reached out all concerned – broadcaster Star, ICC and the BCCI.

None of them was willing to come on record, but the impression that has emerged is that the BCCI is trying to negotiate with the Government of India over the matter so that the income from the tournament, to be distributed among the members of the ICC, is not severely affected.

There is a school of thought that the tax issue is the host nation’s responsibility but the BCCI stand has been that it will do its best, but not guarantee it. Discussions have been going on this even for the next cycle of 2024-31, when India will be hosting three global championships.

With Jay Shah at the helm of the BCCI, the matter is expected to be resolved but the government decision to impose 21 per cent withholding tax could have implications for the next cycle of the ICC media rights that are on sale currently. As previously reported by Cricbuzz, the broadcasters have been seeking clarity on this contentions withholding tax issue.

Star Sports bags CA rights

Cricbuzz has learnt that Star Sports has wrested back the media rights of the Cricket Australia (CA) for the next four years. The agreement, with a provision to extend the deal by four more years, is believed to have been signed by the parties. Sony are the current holders of the Australia cricket rights.

A CA spokesman refused comment saying, “Nothing we can say on the record on that at the moment. I’ll let you know if that changes.” The agreement, for both TV and digital rights, kicks in from next season.

With this all India games in Australia, the Ashes series and the Big Bash League will be beamed, from next season, on Star, which recently retained the television rights of the highly lucrative IPL. It is also bidding for the ICC rights.

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