Global broadcasters of cricket to be taxed in India

Global broadcasters making big money from live telecast of cricket matches in India will have to pay taxes here, ruled the Commissioner of Income Tax (CIT) while dismissing the plea of sports channel Nimbus, which said that it was not liable to be taxed.

Nimbus had entered into an agreement with Prasar Bharti in the year 2002 for production and generation of live television signals of cricketing events, both domestic and international in India from February 2002 to October 2004.

In the present case, assessing officer (AO) imposed a tax liability of Rs 6 crore on Nimbus on the income it had earned by telecasting live cricket matches during 2002 to 2005. Nimbus, however, did not agree with the AO's assessment and took up the matter with the CIT but failed to get any relief.

Although the Singapore-based World Sports Nimbus (WSN) has decided to file an appeal against the CIT (Appeals) order with the Income Tax Appellate Tribunal (ITAT), the tax case will have wide implications for foreign companies telecasting live cricket matches.

The decision of the Income tax Appellate tribunal in this case will have a bearing on the broadcasters of the high profile Indian Premier League (IPL), Sony-WSG combine.