The Board of Control for Cricket in India (BCCI) confirmed its status as one of the richest sporting bodies in the world, with its annual report for 2011-12 boasting of $1-billion (R 5,300 crore) revenue.
However, the figure comes with a few riders. Around R3,200 crore of this magical figure is locked in arbitration or is with tax authorities, but the BCCI believes these are ‘receivables’. On the flip side, if things don’t go the BCCI’s way, it will have to cough up only around R1,200 crore to the media companies, marketing firms and those franchisees whose contracts it cancelled.
While the scale of ‘‘disputed sum’’ would hint at financial mismanagement, the cricket board’s treasurer, Ajay Shirke, is confident of recovery. ‘‘We definitely believe that the amount which is locked in arbitration and is with the tax authorities are receivables. The only issue that is in arbitration is our case with Nimbus for the television rights. Our claim is based on legitimate bank guarantees,’’ said Shirke.
The report clearly outlines that BCCI is involved in over half-a-dozen arbitration cases where it has claimed an aggregate of
R2,226 crore from various parties involved. BCCI also thinks it is being wrongly taxed because it should be exempted from paying taxes. For 2011-12, the BCCI paid almost R1,000 crore in tax “under protest”. It expects a refund of entire R973 crore in taxes in subsequent financial years.
As for the tax wrangle, Shirke said they have a genuine claims for a write-off. ‘‘As far as taxes are concerned, there has been an amendment in the Income Tax Act in 2009 and we were told that we no longer enjoyed the tax exemption. But we still maintain that we are exempted from taxation and the matter is now subjudice. Though we paid some tax ‘‘under protest’’ in the last financial year, we stick to our claim. Above all, the BCCI has a TDS credit with the income tax authorities, amounting to over R600 crore. So our position is very safe and sound,’’ he added.
An analysis of BCCI’s locked income reveals that in some instances BCCI has made