<p>The decision to give tax exemption to ICC—the organiser of the multi-nation cricket tournament—was taken at the Cabinet meeting chaired by the prime minister. <br /><br />Conflict of interest<br /><br />Agriculture Minister Sharad Pawar, who is also the president of the ICC, was present at the meeting. Pawar’s presence while taking the decision on extending tax concessions to ICC has given rise to the vital issue of conflict of interest.<br /><br />“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 newspersons after the Cabinet meeting. The financial implication because of tax exemption will be Rs 45 crore approximately, she said.<br /><br />The Cabinet decided to approve the proposal of the Finance Ministry to extend tax exemption to some part of the income generated by the ICC by holding the Cricket World Cup 2011 under Section 10 (39) of the Income Tax Act, the Minister explained. In reply to a volley of queries whether the Cabinet was aware of probable conflict of interest while considering tax concessions for a body headed by a sitting Cabinet Minister, Soni said there was so such thing.<br /><br />In response to a pointed question whether Pawar batted for the decision she said “nobody fielded or batted for anybody”. Defending the Cabinet decision Revenue Secretary Sunil Mitra said “there is no conflict of interest just because a particular Minister was present. The request for tax exemptions came from the ICC officials and not from the Minister.” <br /><br />Later explaining the rationale behind the Cabinet decision to extend tax exemption to a part of the income of ICC, Mitra said under Section 10 (39) the organisers holding international sporting events in India with participation of countries under their national flags could request for tax exemption on income generated through such events. Mitra however clarified that nearly 28 per cent of income expected to be generated by the ICC in the World Cup 2011 in India would be exempted from tax. However, the remaining 72 per cent of income including telecasting fees would be taxed, he said.<br /><br />Costs and receipts<br /><br />As per an estimate the total receipts of the ICC from the ongoing World Cup is Rs 1,476 crore, while the cost for organising the event is Rs 571 crore. Earlier, the ICC had sought income tax exemption from the Indian government by submitting all the relevant papers to manage its profits/foreign exchange generated at the events in the way it deems fit.<br /><br />In 2005, the Cabinet had approved a proposal to amend the Income Tax Act, 1961 to give an exemption to the income of both residents and non-residents arising from an international sporting event conducted in India. Consequently, exemption from Income Tax was granted to ICC for the ICC Championship Trophy 2006. <br /></p>
<p>The decision to give tax exemption to ICC—the organiser of the multi-nation cricket tournament—was taken at the Cabinet meeting chaired by the prime minister. <br /><br />Conflict of interest<br /><br />Agriculture Minister Sharad Pawar, who is also the president of the ICC, was present at the meeting. Pawar’s presence while taking the decision on extending tax concessions to ICC has given rise to the vital issue of conflict of interest.<br /><br />“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 newspersons after the Cabinet meeting. The financial implication because of tax exemption will be Rs 45 crore approximately, she said.<br /><br />The Cabinet decided to approve the proposal of the Finance Ministry to extend tax exemption to some part of the income generated by the ICC by holding the Cricket World Cup 2011 under Section 10 (39) of the Income Tax Act, the Minister explained. In reply to a volley of queries whether the Cabinet was aware of probable conflict of interest while considering tax concessions for a body headed by a sitting Cabinet Minister, Soni said there was so such thing.<br /><br />In response to a pointed question whether Pawar batted for the decision she said “nobody fielded or batted for anybody”. Defending the Cabinet decision Revenue Secretary Sunil Mitra said “there is no conflict of interest just because a particular Minister was present. The request for tax exemptions came from the ICC officials and not from the Minister.” <br /><br />Later explaining the rationale behind the Cabinet decision to extend tax exemption to a part of the income of ICC, Mitra said under Section 10 (39) the organisers holding international sporting events in India with participation of countries under their national flags could request for tax exemption on income generated through such events. Mitra however clarified that nearly 28 per cent of income expected to be generated by the ICC in the World Cup 2011 in India would be exempted from tax. However, the remaining 72 per cent of income including telecasting fees would be taxed, he said.<br /><br />Costs and receipts<br /><br />As per an estimate the total receipts of the ICC from the ongoing World Cup is Rs 1,476 crore, while the cost for organising the event is Rs 571 crore. Earlier, the ICC had sought income tax exemption from the Indian government by submitting all the relevant papers to manage its profits/foreign exchange generated at the events in the way it deems fit.<br /><br />In 2005, the Cabinet had approved a proposal to amend the Income Tax Act, 1961 to give an exemption to the income of both residents and non-residents arising from an international sporting event conducted in India. Consequently, exemption from Income Tax was granted to ICC for the ICC Championship Trophy 2006. <br /></p>
