The ICC has threatened to shift 2021 T20 World Cup from India over tax issues after the world governing body rejected Indian board’s request for a deadline extension to seek tax exemption from the government due to the COVID-19 pandemic
The International Cricket Council (ICC) has threatened to take away India’s hosting rights for next year’s T20 World Cup after the country’s cricket board (BCCI) failed to secure a tax exemption for the tournament from the Indian government, ESPNcricinfo reported on Wednesday.
In an e-mail, the ICC told the Sourav Ganguly-led BCCI that it reserves the right to shift the showpiece tournament from India.
BCCI had to provide an ‘unconditional confirmation’ by May 18 this year that a solution had been found to a longstanding issue in coordination with the Indian government.
For its part, the BCCI wanted the deadline extended at least until June 30, citing the COVID-19 pandemic as reason for invoking the force majeure clause [unforeseeable circumstances that prevent someone from fulfilling a contract] in the agreement.
The ICC has rejected the request.
“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,” Jonathan Hall, the ICC’s general counsel, wrote to the BCCI on April 29, according to ESPNcricinfo.
“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 (eighteen) 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 June 30, 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.”
This is the not first time the ICC and the BCCI have had differences over this matter.
It has been an ongoing issue since the 2016 T20 World Cup in India, in which the ICC suffered between US$20-30mn losses after the BCCI failed to secure a tax exemption.
In February 2018, the ICC board first warned the BCCI they could lose out on hosting the 2021 T20 World Cup as well as the ODI World Cup in 2023 because the global cricket body could potentially lose US$100mn if it did not get a tax waiver in India.
The BCCI has sought more time to resolve this issue from the ICC, citing the lockdown in India as the reason behind their inability to approach the Indian government to discuss the matter.
“While BCCI has been making all efforts to get a ‘tax solution’ for the event, in view of the current situation, which is beyond the control of the BCCI, it is not possible for BCCI to obtain requisite permission/consent from the Government of India before April 17, 2020. In light of the above, the BCCI hereby requests IBC to grant an extension of time till June 30, 2020 or 30 days after the lockdown is lifted, whichever is later.
“For the avoidance of doubt, this letter constitutes a notice of Force Majeure under Host Agreement,” the BCCI told the ICC.
Earlier Hall had reminded the BCCI that at a February 2018 meeting the IBC board had ‘resolved’ that the BCCI would find a solution by December 31, 2019, a deadline the BCCI had ‘failed’ to meet.
The BCCI was then given an extension until April 17 this year, 18 months from the tournament as stipulated in the host agreement.
Despite the ICC’s stance, officials believe it will remain open to discussions with the BCCI, which appears unperturbed. “The ICC can only do brinkmanship,” a BCCI official was quoted by ESPNcricinfo.
“The broadcasters’ agreement says the ICC has to deliver two events in India,” the official added, linking a resolution to the forthcoming change of chairmanship at the ICC – Shashank Manohar, the incumbent who has had a spiky relationship with the BCCI, is expected to step down in July.
The T20 World Cup is scheduled to be held in October-November as the official replacement for the ICC Champions Trophy in 2021.