The BCCI denies that the sale of their media rights can be considered as 'franchise services' and argues that they are not obligated to pay service tax.
The Board of Control for Cricket in India (BCCI) has approached the Supreme Court seeking clarity on whether the sale of media rights is subject to service tax under the category of 'franchise services' as reported by Brand Equity. This move comes after the Bombay High Court directed the BCCI to seek the Supreme Court's opinion regarding the imposition of service tax on media rights agreements with MSM Satellite (Singapore) and World Sport Group dating back to 2008 and 2009.
The BCCI contests the notion that their sale of media rights constitutes 'franchise services' and therefore, argues that they are not liable to pay service tax. The amount in question totals approximately Rs 250 crore, including penalties.
A Bench headed by Chief Justice DY Chandrachud has sought responses from the Finance Ministry and the Commissioner of Service Tax, Mumbai, regarding the BCCI's appeals challenging the service tax demand.
This update concerns the broadcasting of Indian Premier League (IPL) games held in India. The Supreme Court's decision will have important effects on the taxation of media rights in the context of Indian cricket.