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Friday, January 21, 2011

Seeing some marine in Cricket - Should BCCI enjoy exemptions of duties and taxes ??

I am an avid cricket fan is an understatement but still am opposed to this.

The backbone of the Nation should be agriculture and Industry should be the one driving the economic growth.  There are thousands aspiring to run an industry profitably and the industrial growth will help the Nation building.  Though we have travelled long since the license raj, the importer still has lot of practical impediments even at a time when thousands of products are bought, sold, imported and distributed around.    All goods imported into India have to pass through the procedure of customs for proper examination, appraisal, assessment and evaluation. This helps the custom authorities to charge the proper tax and also check the goods against the illegal import. Upon importation a levy called Customs duty is levied.  It  is an indirect tax on goods of international trade, kind of consumption tax.   The Customs duty is primarily levied for restricting Imports for conserving foreign exchange, protecting Indian industry from undue competition, prohibiting imports / exports for achieving policy objectives of Govt., regulating the trade and coordinating legal provisions with other laws.
Conceptually, the dutiable goods list is very wide and is almost applicable to every product or item imported to India barring a few goods like food grains, fertilizer, life saving drugs and equipment etc.

Import duties form a significant source of revenue for the country and are levied on the goods and at the rates specified in the Schedules to the Customs Tariff Act, 1975 further to Customs Act 1962.  That is not all – there is EXIM (Export Import Policy] – set of guidelines and instructions related to import and exports notified once in 5 years.  These policies can adversely affect the importer, his goods, its price and saleability as also the market share.

As has been, there has always been politically powerful individuals / organizations, which derive undue advantage, evade taxes or have policies amended suiting to their adjustments.  Should the Government be doing something which eventually be beneficial for the people or should it facilitate some is the moot Q !

In less than a month now, the Cricket World Cup 2011 would be on.  14 Nations divided into two groups would be competing in the 10th edition which commenced in 1975.  The inaugural match will feature co-hosts India and Bangladesh at Mirpur Dhaka on 19th Feb 2011.  The One day format is just 4 decades old but its existence is seriously threatened by T20, the local extragavanza of which is to begin immediately after the WC is over.

Most of the Indians love cricket.  In this Nation, cricket is a religion.  The Nation comes to a creeching halt when Sachin is at the crease.  People watch with bated breathe and have more expectations on Sachin  than their life ambitions.   Some of you would also know that Team India is not exactly the National representation but players representing the BCCI – Board of Cricket Control of India.  It is India’s richest sporting body. As a member of the International Cricket Council (ICC), it has the authority to select players, umpires and officials to participate in international events and exercises total control over them. Without its recognition, no competitive cricket involving BCCI-contracted Indian players can be hosted within or outside the country.   BCCI, is in fact, a society registered under the Tamil Nadu Societies Registration Act.  Shashank Vyankatesh Manohar, a prominent lawyer is the current president of the body. N. Srinivasan, who owns the IPL team Chennai Super Kings, is the secretary.  The powerful board often uses government-owned stadiums across the country at a nominal annual rent. BCCI are not required to make their balance sheets public.

For long, tax exemptions were granted to BCCI on the grounds as promoting cricket was a charitable activity.  Recently,   Govt. of India derecognized BCCI as a National sports body as details of electoral process, duration of tenure of officials, statement of accounts etc., were not submitted.  BCCI put up a brave face stating that it was an autonomous body affiliated with the ICC and that they will not bow to the pressure to register with the Govt. 

As a direct consequence,  the Finance Ministry has now denied customs duty exemption to BCCI.  As you would know, sports goods / equipments / consumables imported by National Sports federations are exempt from customs duty.

The BCCI sits on a huge stash of resources and is not dependent on concessions but has enjoyed many tax exemptions and easy clearance of not only players but officials for overseas tours.  It is now reported that a significant amount of the WC event's publicity and promotional material,  are being imported. Signage is being imported from Germany and corporate and hospitality gifts from China. These include merchandising and sponsors' materials like the 'thundersticks' (the inflatable 'sticks' banged together during games) and signs held up by the crowd after every four or six. According to newspaper reports the duty cost would be around a million dollars.  The Organisers are still hopeful of an amenable settlement.

Cricket at best is a Sport and entertainment and should the Nation except millions from duty to a cash rich board ?  Is there real need for importing signs to be held after every four or six ?  Most of us thought that spectators endure all hardship in getting a ticket and bring their own placards and other material for encouraging their favourites !! 

Cricket’s value as a game of entertainment capable of momentarily stopping the heartbeats of millions is undoubted but the fact would also remain that it does not deserve any exemption and special benefits from the Government.    Mind that all such exemptions would indirectly burden the common man in some manner increasing the price of essentials.  The popular joke getting  circulated is there is equality now as the price of onion, petrol and beer are all equal.

Regards – S. Sampathkumar.

1 comment:

  1. Dear - you can spend your talent in more channelised way - Rama