 "CAG, Odisha at loggerheads on taxing IPL matches")
While states like Delhi, Maharashtra, Tamil Nadu and Himachal Pradesh are already taxing the cricketing extravaganza treating it as a 'commercial event', the Odisha finance department has held that IPL matches cannot be qualified as an act of pure entertainment under 'Odisha Entertainment Tax-2006'.
The CAG, however, has not accepted the views of state government, citing instances of other states where the mega cricketing event is taxed owing to its massive commercial appeal.
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Since September 2011, Tamil Nadu has been levying entertainment tax on IPL matches. More recently Himachal Pradesh in March this year decided to charge entertainment tax on IPL matches citing it as a commercial event. The Maharashtra government in January 2010 decided to impose a hefty 25 per cent entertainment tax on IPL matches played in Mumbai and 20 per cent for other cities after being slammed by the CAG.
Meanwhile due to differences with the Central auditor, the Odisha government has now submitted its views after consulting its law department.
“The law department has opined that the IPL cricket matches conducted in the state during 2010-12 are not actually qualified as act of pure entertainment under the Odisha Entertainment Tax (OET)-2006 and so question of exempting entertainment tax does not arise. The finance department would reiterate its views that the IPL cricket matches conducted in the state during 2010-12 do not qualify to be an act of entertainment under OET”, N K Routray, joint secretary (finance) wrote to deputy accountant general-Odisha.
In March 2010, Odisha hosted two encounters of IPL at Barabati Stadium, the home ground of Deccan Chargers where the team was pitted against Kings XI Punjab and Delhi Daredevils. While no match was played in the state in 2011 IPL season, the ground hosted two matches in April-May 2012 where Deccan Chargers clashed with Kolkata Knight Riders and Pune Warriors India.
Odisha Cricket Association (OCA) sources said around 60 per cent tickets were sold during IPL season-2010. In 2012, the Barabati Stadium with a seating capacity of 55,000 had 75 per cent occupancy for IPL-2012 matches.
Taking into account the base ticket rate of Rs 300 and also factoring in the stadium's seating capacity, an entertainment tax of 25 per cent could have fetched Odisha revenue of Rs 1.11 crore from the four matches played in the two IPL seasons.
It may be noted that in 2008, the CAG estimated the loss of the Maharashtra government at nearly Rs five crore due to non-levy of entertainment tax on IPL matches.
“The IPL was conceptualized as an entertainment spectacle and was also pitched as the ultimate destination of television entertainment. It is thus obvious that the main objective of IPL was to provide entertainment and hence merited levy of entertainment duty on sale of tickets. IPL matches had considerable revenue potential and were purely commercial in nature”, the CAG report stated in 2010, slamming the Maharashtra government.