The Board of Control for Cricket in India (BCCI) is seeking clarity from the Supreme Court on whether the sale or grant of its media rights falls under the category of taxable “franchise services,” potentially subjecting them to service tax.
This legal battle stems from a Bombay High Court order last year, directing the BCCI to approach the Supreme Court for a definitive ruling. The question revolves around service tax levied on agreements signed by the BCCI with MSM Satellite (Singapore) Pte Ltd and World Sport Group (India) in 2008 and 2009, pertaining to the telecast of Indian Premier League (IPL) matches within India.
The BCCI is contesting a ₹250 crore service tax demand, including penalties, imposed by the authorities. They argue that granting media rights doesn’t constitute “franchise services” as defined by tax laws. As per the Economic Times, senior counsel Arvind Datar representing the BCCI presented their case before the Supreme Court, emphasizing that broadcasters neither receive representational rights nor perform activities directly linked to the cricket board.
The Chief Justice DY Chandrachud-led bench has now sought responses from the Finance Ministry and the Commissioner of Service Tax, Mumbai, on the BCCI’s appeals. This legal battle will determine whether the BCCI’s media rights deals fall under the ambit of “franchise services” and, consequently, their tax liability.
The outcome of this case could have significant implications for the BCCI’s finances and set a precedent for similar scenarios involving other sporting bodies and their media rights agreements.
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