ITAT clarifies taxability of ‘Global Cricket Corporation’ on sum received from ICC events in India

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  • Last Updated on 28 December, 2022

Royalty under DTAA

Case Details: ADIT v. Global Cricket Corporation (P.) Ltd. - [2022] 145 570 (Mumbai-Trib.)

Judiciary and Counsel Details

    • Om Prakash Kant, Accountant Member & Rahul Chaudhary, Judicial Member
    • Girish Dave for the Appellant.
    • Percy PardiwalaMs Aarti SatheMs Aasavari Kadam for the Respondent.

Facts of the Case

Assessee-Global Cricket Corporation Pte Ltd (GCC) was incorporated as a private company limited by shares in Singapore.

GCC entered into sponsorship agreements with various companies, including LG and Hero Honda, to allow them to advertise on various advertising sites during International Cricket Council (ICC) events. The GCC earned advertising revenues from these agreements. GCC also received payments for broadcasting sporting events. The issue that arose in the instant appeal was the taxability or characterization of the income earned by GCC.

GCC filed return of income declaring nil income claiming the benefit of the DTAA between India and Singapore. GCC claimed that revenue earned by it was business income and not taxable in India in absence of a Permanent Establishment (PE).

During the assessment, the Assessing Officer (AO) held that sum received by GCC for the grant of rights/broadcasting rights was taxable as ‘royalty’. On appeal, the CIT(A) reversed the order of AO. Aggreived-AO filed the instant appeal before the Tribunal.


The Mumbai Tribunal held that the sponsorship fee received by GCC from Indian advertisers (such as LG/Hero Honda) for advertising at ICC cricket events was for advertising brands/products and not for use of equipment. Thus, the same was not taxable as ‘royalties’ under Art 12 of India-Singapore DTAA.

With regards to the composite license fee received from All India Radio (AIR), Prashar Bharti (PB), Setellite Singapore Pte. Ltd. (SET) that was in respect of live exhibition as well as the non-live exhibition. It was held that the consideration was to be first apportioned between live and non-live exhibition rights and the entire amount in respect of non-live exhibition rights was taxable as “royalties” under Article 12.

The consideration for the live exhibition component was to be further apportioned between the live feed and recorded content in the live feed, In the facts of the case, as the agreement was silent on apportionment, it was held that 25% of the Licensee Fee is a fair estimation of the Licensee Fee attributable to the Non-Live Exhibitions and recorded content in “Live” Feed.

Further, there was no material placed on record by both side to arrive at a more precise or better estimation/apportionment. Accordingly, in view of the above, 25% of the Licensee Fee paid by SET/AIR/Prasar Bharti to GCC as fair estimate of income taxable in India as “royalties” in terms of Article 12(2) read with Article 12(3)(a) of the DTAA.

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