The Income Tax Department sent notice to the Board of Control for Cricket in India (BCCI) asking for copies of agreements. The Income Tax department has asked for contract details of all Indian Premier League (IPL) players, as reported by a private news channel.

According to reports, the IT-D wants to check whether TDS Tax Deduction at Source (TDS) was deducted at 11.3%.

Earlier, the Central Board of Excise and Customs had asked its regional commissioners to examine all contracts the BCCI has entered on or behalf of the IPL with all corporate bodies who have either bid for teams or are providing services – from entertainment to broadcasting to advertising.

Under the franchise model, a sponsor owning a team pays a stipulated fee to the BCCI to get ownership. The franchisees have to pay 10 per cent of the bid amount every year to BCCI, as a franchisee fee. With the auction fetching BCCI $723.59 million, BCCI will get $72.36 million each year.

So the BCCI gets liable to pay service tax under ‘business auxiliary service.’

Since players, too, are not playing for the country, their purchase fees would be liable to service tax again under BAS.