Mar 18, 2012: Celebrations of Sachin Tendulkar's
century of centuries may be short-lived in the cricket fraternity as the master
blaster and his teammates will soon have to pay service tax on fees earned by
them. Ditto for players participating in the World Series Hockey.
With the changes proposed in the Budget, the government is going to levy 12%
service tax on all domestic and foreign players participating in IPL tournament
or any other sporting event, which is not the recognised format of the game.
So, the match fee for a test match or a Ranji game will not be taxed but
earnings in private leagues will be. "This is entertainment and not promotion of
the game," said an official.
The cheer leaders of the game have also not skipped the attention of the taxmen.
They will also be taxed in the same manner as the players.
This will also bring into tax net players and franchisees participating in
events such as the World Hockey Series. Earlier, only franchisees were levied
service tax on their earnings.
With this Budget, all foreign and domestic players have been brought under its
ambit. Already, these players were made to shell out tax on their earnings from
endorsements of various brands.
"Any game that is not the recognised format of sports will come under the
service tax ambit," said S K Goel, chairman of the Central Board of Excise and
Besides, the IPL and other sporting events, beauty pageants and reality shows,
too, have been brought under the tax net. So, anyone stepping into Big Boss or
any such TV reality shows, and making an income, will have to pay a service tax
of 12%. Revenue estimates have not been available so far from these categories
The revenue generated in the tax category by bringing in more services under the
tax net will get the government an additional income of Rs 18,660 crore next
year out of a total of Rs 45,950 crore gain in the indirect tax revenue.
In the Budget 2010-11, the government had brought air travel, Bollywood movies,
IPL cricket, beauty pageants and lotteries under the service tax net.
However, this time it has added players and participants in the list of and has
put cinematography in the exempted category. While IPL cricket and events like
beauty pageants fetch the government upwards of Rs 100 crore each, the addition
of participants and players will further jack up this income.