Tax officials to keep a close watch on IPL auction
New Delhi: Enforcement and tax officials will keep a close watch on the proceedings of players auction for IPL-4 which will see as many as 350 top cricketers from India and abroad go under the hammer in Bangalore later this week.
The financial dealings and investments of the earlier editions of IPL are already under the scanner of agencies like the Income Tax department and Enforcement Directorate (ED) since last year when extensive searches were conducted at the IPL headquarters in Mumbai and offices of various franchises.
"Enforcement agencies will keep a close but non-intrusive watch on the proceedings of the auction (on January 8 and 9) and transfer of funds that would happen thereafter. Although, this has nothing to do with the probes that are already on," sources familiar with the development said.
Barring a dozen players, including Indian superstars Sachin Tendulkar, Mahendra Singh Dhoni and Virender Sehwag, who have been retained by five franchises before the auction as per the IPL player regulations, most of the world`s top players would be up for grabs.
The list of players has 11 out of 12 century makers in the previous three IPL seasons, including the Twenty20 league`s fastest century maker Yusuf Pathan and 2010 ICC ODI Player of the Year A B de Villers (South Africa).
"Of the initial 421 cricketers who had expressed interest to participate in the auction, a short list of 350 cricketers has been produced by the various IPL franchises," BCCI Secretary N Srinivasan had said.
While the I-T department is probing the tax evasion angle in striking various deals in the earlier editions of IPL and overseas accounts of "non-residents" who invested in the cash-rich T20 league, the ED is looking at violations of foreign exchange in routing of money.
"The enforcement agencies keep a track of high net worth individuals and transfer of funds as a pre-emptive measure," sources said.
The Finance Ministry has invoked the provisions of the Double Taxation Avoidance Agreement and other tax information exchange treaties with countries like Mauritius, Cyprus, Isle of Mann, Switzerland, Ireland, Germany and UK amongst others to obtain information on the investments made in the earlier versions of the tournament.
The Finance Ministry`s revenue collection arms – Income Tax and service tax department -- get taxes as Tax Deducted at Source from remuneration paid to players, umpires, coaches, commentators amongst others (under income tax category) while advertising, marketing and consultancy services of the sporting extravaganza are taxed under service tax bracket.
The I-T department had collected documents related to bidding, payment of taxes and various other financial details during its countrywide survey of various IPL franchises, with the first such operation being conducted on April 15 last year at the BCCI and IPL premises, including the office of former IPL commissioner Lalit Modi.