Notices have also been sent to Indiawin Sports Private Limited, which controls Mumbai Indians
The Board of Control for Cricket in India has come under the state stamp authority's scanner for allegedly evading stamp duty worth crores to the exchequer over several years. The matter pertains to agreements the board has entered with various sponsors, for which they are supposed to pay a stipulated stamp duty on the agreement value.
Notices have also been sent to Indiawin Sports Private Limited, which controls the Indian Premier League franchise Mumbai Indians. An Indiawin Sports spokesperson told mid-day that the company has submitted its response to the stamp authorities. "The matter is currently under review with the authorities and hence we cannot offer any further comment at this moment," said the spokesperson.
Numerous attempts to reach BCCI officials via their public relations firm did not yield any response. However, a senior board official, on condition of anonymity, said, the BCCI top brass is aware of the issue. "The senior office-bearers are busy with the IPL," he said.
Any agreement entered into in the state of Maharashtra attracts stamp duty, which if not paid, empowers stamp officials to recover 0.1 to 0.5 per cent of the consideration value towards stamp duty depending on the agreement/document. There will also be a penalty of 2 per cent per month from the date of execution of the agreement for non-payment or deficit payment of duty.
The officer said, "Once we are allowed scrutiny of all agreements, we will get a clear picture, as to if the agreement was signed in Mumbai to ascertain any stamp duty payment evasion."
Sources in the department told mid-day that the BCCI had till recently maintained that it is not a public body and hence the provisions of the Maharashtra Stamps Act, 1958, do not apply to it.
The stamp authority will scrutinise the board's agreements for the current financial year before going into previous years.
According to revenue department sources, the most recent notice to the BCCI was sent in the first week of April, by which time the board had come under the Committee of Administrators appointed by the Supreme Court.
Soon after receiving the notice, a BCCI representative visited the General Stamp Office and agreed to co-operate with them. The first case that will be taken up is an agreement for which the stamp authorities have, after adjudication of a document, found that R5 crore duty towards stamp duty evasion.
Suresh Jadhav, Additional Controller of Stamps, General Stamp Office, Mumbai, said: "We have already issued notices to the concerned sponsors/team owners, either of whom as per the sponsorship agreement were liable to pay the stamp duty. We have asked them to submit their say in writing, and have asked them to come for a hearing, to clarify their stand before our competent authority within a stipulated time period and get their documents adjudicated for ascertaining the exact stamp duty. The notices were issued before the start of IPL matches."
Full co-operations assured
Jadhav added that a senior BCCI official visited him and assured full co-operation.
"They also submitted a document for adjudication and the stamp duty calculated on the same was over Rs 5 crore, which the BCCI has now agreed to pay," said Jadhav. "BCCI has requested time till the final IPL matches get over by this weekend and from next week, two of our officers from the Collector of Stamps-Enforcement 1, will visit the BCCI office daily and will examine all relevant documents/ agreements. Officers will list the nature of document/instrument, consideration value declared, clause (who is to bear the stamp duty), calculate stamp duty and levy penalty if applicable and submit the same to BCCI officials, who will get the payment done and will regularise the documents. We will begin our scrutiny for the financial year 2016-17 and will then go for earlier periods."
Senior bureaucrats attached to the General Stamp Office told mid-day that the list of sponsors who have entered into agreements with Indiawin Sports Private Limited include a housing finance company, a developer, an international airline, and a beverages giant.
The sponsorship agreements whose consideration vary from Rs 4 crore to Rs 23 crore, apart from sponsoring matches, also involves endorsements of cricket players for specific promotional activities, including commercial shoots for the sponsoring products or programme or event with the intent to make profits or business out of it, explained an officer.
Four out of 10 sponsorship agreements under scanner were executed in the months of January and March 2017, with sponsorship periods ranging from 3 years to 6 months. According to stamp officials, stamp duty on these four agreements, as per calculation, comes to Rs 29 lakh.
Of the remaining six agreements executed between 2015 and 2016, for sponsorship ranging from two to four years, no stamp duty has been paid for two agreements in some cases and a lower duty paid in others.
"As per our calculation, in this Indianwin Sports's case, we have come across a total amount of Rs 57 lakh due to the exchequer, of which Rs 8.76 lakh has been paid. We are yet to collect Rs 48.95 lakh due to the exchequer and a penalty of Rs 12.21 lakh," said an official.
The Stamp Act
Section 5(h)(A)(iii) of the Maharashtra Stamp Act reads:
Agreement or its records or memorandum of an agreement, if relating to specific performance by any person or a group of persons, where the value of contract exceeds Rs 1,00,000:
a) If the amount agreed does not exceed Rs 10 lakh, stamp duty will be 0.25 percent of the amount, agreed in the contract subject to minimum of Rs 100
b) In any other case, 0.5 percent of the amount agreed in the contract.