The Bombay High Court on Monday sought a clarification from the government on the “code of conduct” for Ministers and heads of government establishments holding positions in profit-earning institutions like the Board of Control for Cricket in India. The court also asked Maharashtra to reply on May 5 on tax exemption for the Indian Premier League. The court was hearing a public interest petition filed by Shiv Sena MLA Subhash Desai.
“Can the Prime Minister or Chief Minister hold posts in such institutions,” the court asked, adding whether such appointments would lead to “a conflict of interest” and could be treated as “offices of profit.”
On the issue of tax on the IPL, government pleader Dhairyasheel Nalavade said the State had taken no policy decision on the matter. Withdrawal of tax exemptions to sporting activities mixed with entertainment was being seriously considered by the government. The IPL, he argued, was one of the many sporting activities, with the component of entertainment.
As per the government resolution of May 12, 1964, tax exemption is granted to purely sporting activities. This exemption was discussed in a Cabinet meeting on January 20, 2010. However, there was no decision on it, Mr. Nalavade said.
BCCI lawyer Raju Subramaniam told the court that except the distribution of tickets for the semi-finals, the play-off for the third position and the final, ticket sales and distributions were in the hands of the franchisees. He said the BCCI had no control on the ticket rates fixed by the franchisees. He said there were several standing committees under the BCCI and the IPL was one such committee.
Arguing about the entertainment component, Mr. Subramaniam said, “Except for the final match, entertainment programmes were not part of any of the matches.”
Meanwhile, Chief Minister Ashok Chavan ruled out levying the entertainment tax on this year's IPL matches played in the State. He told journalists that it was not possible to implement a levy as the IPL season was over.
The Cabinet would take a decision whether to tax IPL season 4. With reference to the court's query on conflict of interest, the government would be seeking legal advice, Mr. Chavan said.
Tax lost
The report of the Comptroller and Auditor-General of India states that the State government lost Rs. 4.99 crore by exempting entertainment duty for IPL's first season where 10 matches were held in Mumbai.
