The sport of Cricket is full of glamour and wealth making it a very motivating factor why most youngsters in India want to become a Cricketer. The Board of Control for Cricket in India (BCCI) gives salaries to cricketers based on their performance in matches which encourages them to play better and bring glory to the country. Even post their service to the nation, most of them continue to live a life of a celebrity with substantial wealth. As we all know, the more wealth, the more it attracts taxes. Just like it is for every other Taxpayer, it is not always a walk in the park. Here is a list of famous cricketers who got into trouble with the Government because of taxes and how the Courts tackled these issues.
Sourav Ganguly
Former Indian Cricket team Captain Saurav Ganguly had a Service Tax demand notice against him quashed by the Calcutta High Court.
He had received remuneration for Writing Articles, Anchoring TV shows, etc which the authority initially determined attracted Service Tax.
A single Judge bench of Calcutta High Court nullified a Show Cause Notice issued against him. While invalidating it was held that, remuneration received for writing articles, Anchoring TV shows, playing IPL would not attract Service Tax under the head under of Business Auxiliary Service.
Sachin Tendulkar
The undoubtedly most famous Indian Cricket Player in the world was also not immune to tax disputes as he had to sought relief from the authorities more than once.
In 2017, The Mumbai bench of Income Tax Appellate Tribunal (ITAT) yesterday dismissed the Department’s appeal against the former Cricketer Sachin Tendulkar and held that income from sale-purchase of shares cannot be treated as ‘Business “Income’ merely because the assessee has availed the service of Portfolio Manager. Later in 2018, the same authority, the ITAT Mumbai bench held him eligible for vacancy allowances under Section 23 of the Income Tax Act as he was not able to find a tenant for his vacant flat at Saphire Park.
Krishnamachari Srikanth
The former Captain is now engaged in the business of Modelling, Cricket Commentary, Journalism, and Consulting & BPCL Dealership once had re-assessment proceedings upheld by the ITAT.
Once, the authorities had noticed that he had sold shares held in his name, minor children, and wife, and had not offered Rs. 4.25 Cr. from the sale proceeds of the shares claiming it to be payment towards overriding garnishee attachment on the shares by Indian Bank.
Finally, last year, the Income Tax Appellate Tribunal upheld the assessment by observing that the assessee entered into a non-compete agreement with the Pentamedia Group of Concerns, of the entire shareholding of the said company ‘Kris Srikanth Sports Entertainment Private Limited’ agreeing not to compete for a period of six years with the said company ‘Kris Srikanth Sports Entertainment Private Limited’ for a non-compete fee of Rs. 7.50 crores which were exempt from the tax being capital receipt.
Concluding the 85-page order, the Tribunal upheld the re-assessment proceedings and held that the payments made to Indian Bank by the assessee to the tune of Rs. 4.25 crores was merely an application of income.
Swapnil Asnodkar
The Mumbai CESTAT had once allowed relief to former Rajasthan Royal’s player, Swapnil Asnodkar, by holding that no service tax is leviable on the Brand Promotion Fee. For the period 2008-2012, he had received a sum of Rs.1.12 crores under an agreement entered into with the Franchise owners.
The department had contended that the said amount is subject to service tax under the heading Business Auxiliary Services on the ground that the amount received by him is towards playing for IPL and for promotional activities.
14 players from various teams in 2019 Indian Premiere League.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench had once granted relief to cricket players L Balaji, Ashwin R, Murali Karthik, Dinesh Karthik, S Badrinath, Vidyut Sivaramakrishnan, Aniruda Srikkanth, Suresh Kumar, Yo Mahesh, Hemang Badani, C. Ganapathy, Arun Karthik K B, Kaushik Gandhi and Palani Amarnath. By holding that these players are not liable to pay service tax on the amount received from the franchise.
The department proceeded against these cricket players observing that they were providing Business Support Services (BSS) and Business Promotion Services (BPS). The Tribunal observed that the categorization of the same set of activities under two different services for two different periods is not permissible. It was held that having taxed under BSS, the Revenue should not have changed its stand for a different period (and contended that the services are taxable under BPS) when there is no change in the nature of services alleged.
Sameer Dighe
In 2018, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) granted tax relief to India’s former wicket-keeper, Sameer Dighe by holding that the proceeds from a benefit match of around Rs.50 lakh cannot be taxed in the hands of the cricketer.
Dighe shot to fame during the India-Australia test series in 2001 where he played a significant role in the country’s win. Soon after, in 2002, he retired from international cricket. During the relevant period, received Rs.50 lakhs from a benefit match, organized for him by BCCI.
Cheteshwar Pujara
Cheteshwar Pujara received a major relief from the Bombay High Court in 2018 when it quashed an order relating to Service Tax collection against him.
In the year 2012, the Service Tax department has passed an order in connection with to Pujara’s service tax collection during his association with the Kolkata Knight Riders franchise of the Indian Premier League (IPL). He failed to appear before the authority to file his say in the matter. The Commissioner then passed the orders because Pujara had failed to appear before him despite seeking adjournments twice.
Karn Sharma
In 2018, the Ahmedabad bench of the CESTAT held that no service tax liability can be attributed to the cricket players for promotional activities provided by them during the Indian Premier League (IPL) prior to 01.07.2010 while granting relief to cricket player Karn Sharma.
Karn was playing for Royal Challengers Bangalore when he received Rs. 20 lakhs for the period 01.04.2010 from 31.12.2010 from the franchise. The service tax department took a view that he was promoting activities of the franchise by wearing the franchisee’s official cricket clothing, displaying the franchisee’s mark/logo, etc. which was nothing but akin to promotion or marketing of the logo/brands/marks of the franchisee/ sponsor. The department said that the services/promotional activities provided by the appellant during the said IPL matches were covered under the category of Business Support Service.
Partiv Patel
ITAT Ahmedabad had once directed the Authority to reconsider allowability of expenditure claimed by Cricketer Parthiv Patel and ruled cricket to be a profession for the purpose of taxation.
Parthiv Patel who derived his income from playing cricket, sponsorship, and marketing, filed a return declaring his income under the head “P&G from Business and profession”. He claimed various expenses under the head of business development, office, salary, office rent, other interests, petrol expenses, repair/maintenance, telephone, traveling, vehicle, stationary, and depreciation totaling Rs.31,73,928/- and Rs.45,88,255/- for two separate years. The Assessing Officer however had denied the claim by finding that these are not business expenditures since playing cricket is not a “Business or Profession”.
