BCCI billion dollar purse's loose strings

The BCCI confirmed its status as one of the richest sporting bodies in the world, with its annual report for 2011-12 boasting of a $1 billion (Rs 5,300 Crore) purse, but the figure comes with a few riders.

Around Rs 3,200 crore of the magical figure is locked in arbitration or with tax authorities, but the BCCI believes these are 'receivables'. On the flip side, if things don't go BCCI's way, it will have to cough up only around Rs 1,200 crore to the media companies, marketing firms, and those franchisees whose contracts it cancelled.

While the scale of 'disputed sum' would hint at financial mismanagement, the cricket board's treasurer Ajay Shirke is confident of recovery. "We definitely believe that the amount which is locked in arbitration and with the tax authorities are receivables. The only issue that is in arbitration is our case with Nimbus for the television rights. Our claim is based on legitimate bank guarantees," said Shirke.

The report clearly outlines that BCCI is involved in over half-a-dozen arbitration cases where it has claimed an aggregate of Rs 2,226 crore from various parties involved. BCCI also thinks it is being wrongly taxed because it should be exempted from paying taxes. For 2011-12, the BCCI paid almost Rs 1,000 crore in tax "under protest". It expects a refund of entire Rs 973 crore in taxes in subsequent financial years.

As for the tax wrangle, Shirke said they have a genuine claims for a write-off. "As far as taxes are concerned, there has been an amendment in the Income Tax Act in 2009 and we were told that we no longer enjoyed the tax exemption. But we still maintain that we are exempted from taxation and the matter is now sub-judice. Though we paid some tax 'under protest' in the last financial year, we stick to our claim.

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