Parliamentary report says BCCI, IPL evaded tax

CNN IBN

New Delhi, 03 August 2011: A parliamentary panel has rapped on the knuckles of the BCCI and Income Tax Department, alleging that four teams of the cash-rich Indian Premier League (IPL) routed investment from abroad.

 

The panel - headed by former Finance Minister Yashwant Sinha - has demanded that all tax exemptions given to the BCCI be withdrawn and those given specifically for the World Cup be reviewed.

 

CNN-IBN has accessed a copy of the report to be submitted in Parliament later this week. CNN-IBN has learnt that in the 55-page report, the committee has found BCCI has regularly refused to pay taxes. Even this year, they paid On Rs 5 crore out of Rs 160 crore of service tax.

 

BCCI paid no income tax in 2008-09 and only Rs 14.86 crore in 2009-10, when gross revenues earned by BCCI was Rs 661 crore only from IPL. The committee also hints at connivance between Income Tax officials and BCCI.

 

The report says that the Income Tax Department has been lax and soft on BCCI, allowing them to enrich their coffers at the expense of the exchequer.

 

Not just that, the report says that India’s cricket’s money-spinner, the IPL, is mired in tax-evasion, several IPL franchises have funded their teams through Hawala transactions and round-tripping of money from foreign countries.

 

Four IPL teams: Mumbai Indians, Rajasthan Royals, Kolkata Knight Riders and Kings XI Punjab have been named for getting foreign investments without necessary approvals.

 

All the four IPL teams have got investments routed through tax-havens like Mauritius, Bahamas and British Virgin Islands, yet they did not get any mandatory approval from either Reserve Bank of India or other agencies.

 

The parliamentary committee has found that the IPL governing council deliberately overlooked these irregularities. The committee also slammed the tax exemptions given to the ICC run world cup as unjustified. Sharad Pawar as president of ICC reportedly used his clout to get the tax exemption.

 

The report castigates the BCCI top-brass for blaming only former IPL Commissioner Lalit Modi for the mess. Because these documents which were presented as evidence clearly proved that the BCCI top brass President Shashank Manohar, Secretary Naranswamy Srinivasan, Treasurer MP Pandove as well as the entire Governing Council of IPL were the ones controlling the finances in IPL.