BCCI Set To Lose $58-116m By Hosting ODI World Cup In 2023 If Indian Government Denies ICC Tax Waiver - Reports

The Board of Control for Cricket in India (BCCI) reportedly stands to lose anywhere from $58 million to $116 million by hosting the ICC ODI World Cup in 2023 in India if it fails to get the tax waiver from the central government. The marquee event is scheduled to be played in India in October-November next year.

If the BCCI fails to get the obligatory tax waiver from ICC, which it is expected to get as cricket is treated as a sport, then its share of the ICC’s central revenue pool as a result of the tax imposed by the Indian government on the World Cup will be substantial.

The tax exemption has been part of the host’s agreement the BCCI signed with the ICC in 2014, when three men’s events were awarded to India: the 2016 World Cup, the 2018 Champions Trophy (later changed to the 2021 T20 World Cup, which was moved to the UAE and Oman) and the 2023 World Cup.

Any Tax Incurred By BCCI By Hosting 2023 World Cup In India Will Be Adjusted From Its Share Of Revenue From ICC

As per the agreement, the BCCI was “obligated” to help the ICC (and all its commercial partners involved in the tournament) secure the tax waiver. However, the tax waiver has been a contentious issue between the BCCI and the Indian government.

The Indian government had charged Star India 10.92% in taxes which led to ICC deducting “nearly $23.5 million” from the central revenue pool from the T20 World Cup in 2016, the last ICC event India hosted.

The BCCI has challenged the ICC on that at the global body’s disputes tribunal. Even as it awaits a final decision from the tribunal, the BCCI has said it had opened discussions with India’s finance ministry to “deliver a tax exemption or a tax solution” for the 2023 World Cup.

“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 revenue from the ICC,” the BCCI said on Thursday as per ESPNCricinfo.

Though originally BCCI had to get the exemption 18 months before the event, it has requested ICC to extend the deadline to May 31 this year from April.

“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 timeframe. 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,” BCCI stated in its update.

BCCI has listed the ICC’s broadcasting income from next year’s World Cup in India at an estimated $533.29 million. If the government levies the 10.92% tax on broadcasters, it will come to $52.23 million and roughly $116.47 million if the tax component were to be 21.84%, which the government desires.

Whatever the final amount comes to, it will be deducted from the BCCI’s share of ICC’s central revenue pool, which is calculated to be $405 million based on the current rights cycle (2016-2023) and an estimated $ 2.7 billion earnings for ICC.

The Indian board has said that it was hopeful of a solution as it is engaging at the “highest level” in the Indian government. It said in the update that BCCI is currently working with the Ministry of Finance, Government of India to reduce the tax order to 10% (excluding surcharges) instead of 20%.

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