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NEW DELHI: With a windfall in revenue expected after India reached the final of the World Cup, sharp divisions emerged in the Union Cabinet over the grant of the Rs.45-crore tax exemption to the International Cricket Council (ICC).
Several Ministers, including Sports and Youth Affairs Minister Ajay Maken, are against such a largesse for the cash-rich body.
At the Cabinet meeting chaired by Prime Minister Manmohan Singh on Thursday, Mr. Maken strongly opposed any tax waiver for the ICC-backed World Cup, arguing that the ICC was making crores of rupees and did not lack any sponsorship. He made these remarks in the presence of Agriculture Minister Sharad Pawar, who is also the ICC president.
Mr. Maken argued that the cricket body was given such a big “cash relief” when the budget of the Sports and Youth Affairs Ministry meant for various sports and events was slashed. He was backed by Minister for Housing and Urban Poverty Alleviation Kumari Selja, who also questioned the waiver.
Mr. Maken went on to say that the need of the hour was to grant such waivers to other games and financial help was required to ensure India did well in non-cricket events. “The Sports and Youth Affairs Ministry is planning to organise panchayat-level sports events to promote sporting activities at the grassroots, which need financial support. The revenue from taxing of such events [such as the World Cup] could have been used to promote other games in the country,” he is learnt to have remarked.
Mr. Maken said the revenue figure of Rs. 900 crore given by the ICC was not correct; it could be much higher as important matches, including the semifinal and the final, were played in India. “With India reaching the final, public interest and viewership will be so much higher, leading to windfall gains for the sponsoring companies. The exemption was sought on the total income raised in India, and not the match-specific [income],” he said.
At this point, Ms. Selja said Mr. Maken's point was valid and should be considered on merit. Mr. Pawar did not utter a single word, but his Nationalist Party Congress colleague and Minister for Heavy Industries Praful Patel backed the grant of the waiver, saying the law provides for such an exemption.
The income tax exemption was granted to the World Cup as it met criteria specified under Section 10(39) of the Income Tax Act 1961. To qualify for tax exemption, an event has to be recognised by a global body governing the sport, and more than two nations should take part in the event.
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