The Central Excise and Service Tax Appellate Tribunal (CESTAT) has ordered the Board of Control for Cricket in India to pay Rs three crore towards service tax dues for the period 1999-2000 to 2002-2003 by February 27.
The BCCI is liable to pay Rs 11.19 crore as service tax for the revenue earned from advertisements and sponsorships from various companies for Test matches during the relevant period, Commissioner of Central Excise (Service Tax) Satyendra Singh said.
The commissioner said his office had issued show cause notice to the BCCI, asking it to pay Rs 11.19 crore towards service tax liability.
However, the BCCI filed an appeal before the appellate tribunal, which stayed the order and asked the Board to make Rs three crore as interim payment.
The BCCI has been given time till February 27 to pay the sum and also file a compliance report.
The date for the next hearing would be decided on February 27.
Notably, in December 2005, the BCCI, by awarding official kit sponsorship to global sports accessories major Nike for Rs 196.66 crore, had become the world's most valued brand as seen by sponsors.
This is not for the first time that BCCI has been served show cause notice by the excise department, sources in the excise department said.
Some of these notices are adjudicated while others are in the process of adjudication, they added.
The BCCI generates lot of revenue by way of advertisements on hoardings, displaying logo of sponsors on apparels of players. Generally the arrangement between BCCI and sponsors of matches is that two-third space in the stadium is reserved for advertisements of the sponsors and one-third for others.
The excise department is of the view that by collecting amount from sponsors for display of advertisements amounted to rendering services of advertisement agency and hence BCCI fell within the purview of service tax, the sources said.
When contacted, BCCI executive secretary R S Shetty said he was not aware of the notice issued by the excise department.