IPL earnings: Parthiv, Siddharth taxed

AHMEDABAD: Parthiv Patel and Siddharth Trivedi might have taken it as just another cricketainment show with handsome fees attached. But for the central excise department, the two players have offered a service which needs to be taxed.
The department has issued show-cause notices to Patel and Trivedi, asking them to pay service tax on their earnings from the last three seasons of the Indian Premier League (IPL).
Patel has been asked to pay Rs 42.84 lakh and Trivedi Rs 6.59 lakh as tax, which has been calculated on the money they received from their respective franchises.
Officials said the players were asked to furnish their total payment and the breakup indicating money received from sponsorships and earnings as match fees. Since the disclosure was not forthcoming, the tax demand was raised.
The notices say that the players offered 'business support services' to their franchises. While Patel was picked by Chennai Super Kings for Rs 1.3 crore per season, Trivedi played for Rajasthan Royals for Rs 20 lakh per season.
Sources said Trivedi also received Rs 12 lakh as performance bonus for 2008-09, but that was included to calculate tax liability. Earlier, the department had sent such notices to four players of Kings XI Punjab, including Yuvraj Singh, directing them to pay service tax on their income.
Confirming the issuance of the notices, Patel's chartered accountant Hemal Desai, said: "We have been discussing the matter with the franchise for it's for them to separate the money given to players as match fees and earnings from sponsorships."
Desai said the 'business support service' category under which tax demand had been raised did not fit with the cricketing event. "Players in many other games wear T-shirts with logos in the IPL because of its hype," he said.
"Despite intimations and initial notices served to them, none of the two players declared their earnings from endorsements and money received as fees for playing matches.
"We later decided to serve show-cause notices and levied tax on total income from all the seasons of IPL," said a senior service tax official.