Cricket boards' tax status in for review following BCCI issue

The tax exemption status of the several state-level cricket boards will soon come up for review following the case concerning the tax status of their parent body, the Board of Cricket Control in India (BCCI).

According to sources, the BCCI is a test case and the decision to grant or refuse tax exemption to it will decide the fate of may a charitable trusts and institutions which over the years have become profitable ventures.

The tax department has challenged the eligibility of BCCI, tabling the issue of telecast rights to prove its point.

It mentions that sales of telecast rights to private television channels have helped BCCI earn crores of rupees.

"Had the intention of BCCI been of an institution of general public utility , the telecast rights could have been sold to Doordarshan as it has a much wider reach, in terms of geography and is within the accessibility of the marginal viewer in terms of the financial status," said the source.

The source said even otherwise the complexion of BCCI has undergone a sea-change since its inception in 1940.

With the arrival of new private sector channels, cricket is no longer a sport but a big business. "BCCI invites bids for selling telecast rights and what more one needs to be a business venture?" the source asked.

The board had granted the exemption to sports body in 1984 but at that point of time sports organisations were confined to promotional aspect of sports. Today, these bodies are raking in huge profits.

Therefore, if the dominant purpose of a trust or institution is not advancement of general public utility but promoting its own business interests. So the exemption status granted stands forfeited, sources said.

Moreover, Section 10(23) under which BCCI used to claim exemption, came to an end in April 2003.