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New Delhi: After the Income Tax department asked for over Rs 600 crore from the Indian cricket board (BCCI) as tax, the service tax department, another arm of the finance ministry, has slapped as many as 32 showcause notices on Indian Premier League (IPL) franchises for alleged duty evasion to the tune of nearly Rs 64 crore.
The total collection of service tax by the department during the third season of IPL was Rs 29 crore. This was almost half of what it was during IPL-2 which was held in South Africa. In the second season of IPL, the service tax collection was Rs 64 crore. The total collection made by service tax authorities in the first season was only Rs 81 lakh.
While investigative agencies are yet to conclude probe on the remittances and shareholding pattern of these franchises, the Central Board of Excise and Customs (CBEC) constituted a team to review payments received from IPL on suspicion of evasion. Commissioners in different zones were asked to look into the accounts of these franchises and seek details of their earnings and expenditure.
Sources said service tax authorities in Bangalore had issued a maximum of 14 showcause notices for estimated ‘evasion’ to the tune of Rs 8.85 crore. The highest ‘evasion’ of Rs 37 crore, however, has been detected in the Mumbai region.
The notices were issued to franchises after tax officials accounted for all services provided by various stakeholders. Service tax is levied on franchise fees paid by eight franchises to BCCI, remittances made to UK-based IMG for management and business consultancy services, on payments received by franchises on sale of advertisement space and on income from the sale of game rights.
