Central excise slaps Rs 1.15 cr service tax notice
September, 16th 2010
Central excise department has slapped a notice on cricketer Yuvraj Singh of Kings XI Punjab franchise seeking payment of service tax to the tune of Rs 1.15 crore raised on his income from two seasons of IPL and endorsements.
Yuvraj's tax consultant, while refuting the claims of tax authorities, put the onus on IPL franchise KPH Dream, which owns Kings XI Punjab, for the payment of service tax for availing the cricketer's services in promotional activities during the IPL matches.
"We have served notice on Yuvraj Singh asking him to pay service tax amounting to Rs 1.15 crore on money he earned from two IPL seasons and doing endorsements," a senior official of the Central excise department, Chandigarh region, said.
Serving the notice by including the income of Yuvraj under 'Business Auxiliary Services' head, the department has assessed the service tax amounting to Rs 96.44 lakh from playing two seasons of IPL and Rs 19.53 lakh from participating in TV show 'Dus Ka Dum' and engaging in promotional activities for two agencies --- Cornerstone Sports and Rhiti Sports.
Central excise department has calculated an income of Rs 8.51 crore from IPL matches, Rs 99.99 lakh from winning 'Dus Ka Dum' show last year and Rs 65.30 lakh from promotional activities for two agencies, as per the notice.
The department had already served notices on three other IPL players VRV Singh, Sunny Sohal and Uday Kaul, asking them to pay tax of Rs 11.33 lakh, Rs 4.79 lakh and Rs 4.53 lakh, respectively.
The decision to demand tax from cricket players follows the non-disclosure of break-up of earnings by them from IPL matches.
"Players were asked to give the break-up of their earnings from cricket matches and endorsements but they failed to provide us separate figures. Therefore, we have been forced to levy tax on their income, whether it is match fee earned by players from IPL-1 and IPL-II season, after assessing their income on individual basis," the official said.