BCCI is in talks with the Government of India about a 21% tax levy. Star Sports withheld $ 22.5 million from the $ 225 million tournament fee in 2016, when the tax levy was 10%.
The new tax rate of 21% has caused concern among stakeholders as India prepares to host the ODI World Cup 2023 in October-November next year. The last time a global event held in India was the 2016 T20 World Cup. When the tax levy was 10%, with Star Sports keeping USD 22.5 million of the USD 225 million tournament fee.
The ICC attempted to recover that amount from the BCCI, which was led by the Committee of Administrators, in 2016. Meanwhile, the broadcast fees for this year’s ODI World Cup are expect to reach a mind-boggling USD 500 million. Implying a staggering USD 100 million in taxation.
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The BCCI is negotiating a 21% tax levy with the Government of India.
“A letter from India’s Ministry of Finance appears to have recently gone out to all concerned informing them that the tax levy on the 2023 World Cup will be 21%, more than double the cess collected from the last global event held in India, the Twenty20 World Cup in 2016, leading to a debate on who will bear the burden of the new withholding tax,” Cricbuzz reported.
As the BCCI attempts to discuss the taxation issue with the Government of India, India’s finance ministry has sent a letter to the relevant authorities regarding the new taxation. “With Jay Shah at the helm of the BCCI, the matter is expect to be resolve. ” The report continued, “but the government’s decision to impose a 21% withholding tax may have implications for the next cycle of ICC media rights.”
Notably, three global events are schedule to take place in India during the 2024-2031 cycle, and thus the financial impact through taxes must be considered. According to reports, the BCCI is currently in discussions with the Government of India to ensure that the income generated by the tournament is not adversely affected, as it would be if the tax is levied at the current rate.
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