A fortnight ago, Director General of Service Tax (DGST) told field functionaries to collate findings on “relevant facts, the views regarding taxability of such activities, the amount of service tax involved, the amount of tax dues collected, if any” to be reported to him.

Under the franchise model, a sponsor owning a team pays a stipulated fee to the BCCI to get ownership. The franchisees have to pay 10 per cent of the bid amount every year to BCCI, as a franchisee fee. With the auction fetching BCCI $723.59 million, BCCI will get $72.36 million each year.

So the BCCI gets liable to pay service tax under “business auxiliary service.”

Since players, too, are not playing for the country, their purchase fees would be liable to service tax again under BAS.

Broadcasting rights to a consortium of Sony Television and Singapore-based World Sports Group for 10 years for over $1 billion and their sale of time slots for ads would also attract service tax under the broadcasting service.