ICC World Cup 2023: How much would BCCI lose if Indian government denies ICC tax exemption?

India will be hosting the ICC World Cup 2023. However, the BCCI is already pondering its finances to host the tournament. Also, it could lose hefty bucks if the government denied ICC a tax exemption.

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The Board of Control for Cricket in India (BCCI) could lose around ₹955 crore ($116 million) if the central government sticks to its decision to impose a 21.84% tax surcharge on International Cricket Council's (ICC's) broadcast revenue from the 2023 ICC World Cup, according to a report by the BCCI. India will be hosting next year's 50-over global spectacle in October-November. A tax surcharge is "an additional charge, fee, or tax added to the cost of a good or service beyond the initially quoted price". A surcharge is frequently added to an existing tax and is not incorporated in the stated cost of the good or service.

As per ICC norms, the host nation is needed to get tax exemption from the government for organising global competitions under the world's governing body. Since India's tax regulations don't allow such immunities, the BCCI has already yielded about ₹193 crore (USD 23.5 million), with the government not exempting tax surcharge for hosting the 2016 ICC T20 World Cup. The BCCI continues to fight the case in the ICC tribunal.

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"The next ICC major men's event, the ICC Cricket World Cup 2023, is scheduled to be held in India in October & November of 2023. The BCCI was obligated to deliver a tax exemption or a tax solution to the ICC for this event by April 2022," stated a BCCI report circulated to the state units ahead of its October 18 Annual General Meeting (AGM) in Mumbai.

"The ICC Board further extended this timeline till May 31, 2022. At the start of this financial year, the BCCI had advised the ICC that in line with the tax order for the 2016 event, it was expected that a 10% (excluding surcharges) tax order could be obtained as an interim measure for the 2023 event within the required time frame. The ICC has now received a 20% (excluding surcharges) tax order for its broadcast revenue for the 2023 event from the tax authorities in India," the report added.

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Per the BCCI paper shared with the state associations, the negative effect on the BCCI's income from the ICC, if a 21.84% tax is disbursed, would be $116.47 million. It is apprehended that the BCCI is attempting to mediate and bring down the tax surcharge percentage to 10.92% from the current market of 21.84%. If the BCCI can decrease the tax surcharge to 10.92%, the earnings loss would be close to ₹430 crore ($52.23 million).

"The BCCI is currently working with the Ministry of Finance, Government of India and have represented against this 20% [excluding surcharges] tax order at the very highest level and are hopeful that a 10% [excluding surcharges] tax order would be forthcoming shortly. It is to be noted that any tax cost incurred by the ICC for the 2023 event in India will be adjusted with the BCCI's share of the revenue from the ICC," the report additionally framed.

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The BCCI's stake from the ICC's central revenue pool for 2016-23 is $405 million (₹3,336 crore). The ICC expects $533.29 million (₹4,400 crores approx) from the broadcasting remuneration for the 2023 India event.

(With inputs from PTI)