The Maharashtra state government in India has decided to levy an entertainment tax on the Indian Premier League (IPL), an arm of the Board of Control for Cricket in India (BCCI), while widening the net of its entertainment tax to include pubs, discotheques, internet protocol television (IPTV) and "permit rooms with a live orchestra" (previously dance bars), which will also attract tax at similar rates.
This follows moves by the Central Income-Tax department to disallow tax exemptions to the BCCI because it is now primarily a commercial entity, no longer promoting cricket as a "charitable" activity. The income generated from the IPL was up till now tax-free and shared between the umbrella cricket body and its franchisees. The BCCI generates huge surpluses through media rights and sponsorship, some of which is reinvested in the sport.
Chief minister Ashok Chavan told the Times of India: “Cricketers are making huge money and the game is also receiving immense sponsorship. Since the revenue generated is big we decided to levy the tax." The matches played within the Brihanmumbai Municipal Corporation’s jurisdiction will attract a 25% tax, in other civic bodies it will be 20%, and in the rest of Maharashtra it will be 15%.
The tax was said to be applicable to all one-day international matches, IPL 20-20 cricket matches and the like, but not to test matches, Ranji trophy and school cricket.
The Maharashtra state revenue department anticipates tax revenues of INR250m (USD5.4m) annually, plus another INR200m from a further betting tax added to the totalizator and the mobile tote at the same time.
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