The ICC has threatened the BCCI to take away India’s right of hosting the 2021 T20 World Cup if the BCCI doesn’t obtain a tax exemption from the Indian government for the event.
The ICC has warned the BCCI about possible consequences for future hosting of world events after cricket’s main governing body suffered close to a $30-million loss from the 2016 T20 World Cup in India due to hefty tax rates.
ESPNcricinfo reports that negotiations between the ICC and BCCI had become tense in recent months, with the BCCI failing to provide a definite agreement on a tax waiver by 18 May.
Instead, the BCCI requested the deadline be moved to at least the end of June due to disruptions caused by the Covid-19 pandemic but the ICC quickly rejected the notion.
In a series of emails, ICC general counsel Jonathan Hall warned the BCCI that the ICC is more than capable and allowed to remove India’s hosting rights for the event, which is due to start in October next year.
‘In light of the BCCI’s notification of force majeure, we would highlight the obligation on the BCCI of the Host Agreement and that IBC [ICC Business Corporation] is entitled to terminate the agreement with immediate effect at any time from 18 May 2020,’ Hall wrote.
‘The BCCI has clearly had many years to arrange the tax solution, which is why the agreement asks for it to be provided, no later than 18 months prior and why the BCCI was required to provide it by 31 December 2019. In such circumstances IBC is not prepared to agree to the requested extension to 30 June 2020 or 30 days after the lockdown is lifted, whichever is later.
‘In the meantime, all of IBC’s rights are reserved in full including the right to challenge whether or not a valid force majeure exists.’
Should the BCCI fail to get a tax exemption from their national government for the T20 World Cup, then the ICC could lose as much as $100 million in the process.
The ICC has, therefore, been in regular contact with the BCCI since the previous event in 2016 to seek confirmation that the 2021 edition won’t lead to a similar financial loss.
At a 2018 meeting the BCCI assured the ICC that a solution would be found before the start of the 2020 financial year, a deadline which they already missed.
The BCCI, however, denied this claim by saying the agreement was to set an original deadline of 17 April 2020.
‘We disagree the BCCI could have avoided the effect of the FM [force majeure] event. As should be evident from the correspondence enclosed with this email, BCCI has been making efforts to procure a tax solution from the Government over a period of time. These efforts were ongoing at the time when COVID-19 was declared a pandemic and have been interrupted by the significant restrictions imposed by the Government of India,’ read a statement by the BCCI.
The BCCI has since cited problems of setting up meetings and negotiations with the Indian government due to a nationwide lockdown imposed in March.
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