Areas of Service
- International Tax
- International Tax Litigation
- Competition Law
- Human Resources Law (Employment and Labour)
- International Dispute Resolution and Investigations Practice
- Mergers & Acquisitions
- Private Equity Investment
- Joint Ventures
- Capital Markets
- Private Client
- Fund Formation
- Technology Law
- Intellectual Property
Sports over the past couple of decades have developed itself as a multi-billion dollar industry. An industry with an all-encompassing worldwide presence is bound to raise its own disputes. This has resulted in the growth and development of sports law as a separate regulation in its own right. Sports law in itself is not always a separate stream of law. It is typically a collection of laws such as labor law, contract law, competition or antitrust law, and tort law. Defamation and privacy rights issues also form an integral aspect of sports law1.
The world of sports is mostly self-regulated by the apex body of the said sport. The international sports body for each sport, made up of national bodies of different countries is at the top of the hierarchy. The national sports bodies comprise the provincial or state bodies of different countries. The provincial state bodies comprise of various different districts or clubs.
In India, professionalization of sport is still a relatively new phenomenon and at present limited to a few sports. Thus there is a significant informational gap and asymmetry in relation to various aspects relevant to the field of sports. With the move to professionalization of sport in India, there is also a parallel need to not only legally regulate and monitor the field, but also to produce high quality research in the field of sport and the law; provide up to date information on current sports law issues including a resource of sports law material; provide consultancy to sportsmen and sports bodies concerning sports law issues; promote undergraduate and postgraduate study, research and continuing education in sports law; promote ethical solutions to legal issues in sport and notions of "Fair-Play"; and positively address all issues of discrimination in sport.
INTERPLAY BETWEEN SPORTS AND LAW
Taxation in India – Sportsmen
- The domestic tax law of India i.e the Income-tax Act, 1961 provides that in case of sportsmen or artists participating in such events or shows, all income accruing or arising or deemed to be accruing or arising, received or deemed to be received in India is taxable in India. The income earned by non-resident sportsmen, who are not citizens of India or the income earned by non-resident sports association or institutions is required to be determined in accordance with the provisions of section 115BBA of the Income-tax Act, 1961. In the case of the sportsmen, this would include the income by way of participation in India in any game or sport, from advertisement or contribution to any newspapers, magazines or journal of any articles relating to sport or game in India. The tax should be deducted at the source under section 194E from such payments. The provisions of section 115BBA would be applicable to the guarantee money receivable by the non-resident sports association. The payment by way of guarantee money to non-resident sport associations needs to be considered in terms of the Article on Other income or on Income not expressly mentioned of the relevant DTAA.
- In addition to same, the Central Government is empowered by section 10(39) of the Income Tax Act, 1961 to exempt any international sporting event being held in India from taxing. Such exceptions are generally granted when the event being held is of international importance and being organized by an international recognized body. Recently such exemptions were given to the World Cup organized by International Cricket Council (ICC), The Commonwealth Games New Delhi 2010 and the F1 race event held in Noida in later half of 2011.
- In the case of non-residents, in addition to the provisions of the Income-tax Act, 1961, the applicability of Double Taxation Avoidance Agreement (DTAA) should be examined, since as peer Section 90 (2) of the Income Tax Act, 1961 the provisions of the DTAA shall apply to the extent they are more beneficial. Under the DTAAs, usually there is a separate Article on Artists and Sportsmen, which often provides for source based taxation in India of the income from the personal activities of the sportsmen or artists in India. Even where the income from personal activities accrues to another person and not directly to the artists or sportsmen, it is often still taxable in India in accordance with this article in the DTAAs. The advertising or sponsorship income, etc., of the sportsman or artists, which is related directly or indirectly to performance or appearance in India would also be covered under the said DATA Article on Artists and Sportsmen. Where, under the same contract or under a separate one, the performance is recorded and royalties are stipulated to be paid, the same would be covered under the Article on Royalties in the DTAA. Issues relating to the applicability of service tax also arise on income earned from sponsorship or advertising in India.
- The tax residency of sportsman and artistes poses another challenge, given that they constantly travel around the globe and often end up being tax residents of more than one country and in certain cases of no country at all. This leads to various tax issues including the eligibility of a sportsmen/artiste for DTAA benefits as well as disputes regarding which country has the primary right to tax a particular source of income.
- On the indirect tax front, issues relating to applicability of service tax also arise on income earned from sponsorship or advertising in India often arise and need to be studied in greater detail.
Sports and sports persons cannot be bound by any international, regional or national boundaries. Sportspersons from various countries keep travelling to different locations around the globe throughout the year in order to participate in different sporting events and functions. As we know, free migration from one country to another is possible only if a person takes the requisite permits and more importantly the correct category of permit, which in technical jargon is referred to as visa. It is pertinent to note that often immigration issues arise on account of persons travelling on an incorrect category of visa.
There may be several legal issues that may come up in relation to a sportsperson who is a person of Indian origin (PIO), non-resident Indian (NRI) or for that matter a foreigner playing for Indian clubs. By way of an example, a person born to a Japanese mother and an Indian father and living in India and playing for a football club in India, was considered ineligible to play for the Indian national football team as the applicable rules required a member of the team to be a citizen of India2. Issues like this are not far-fetched in an ever expanding globalized world. There are several examples in the international context, of a citizen of one country playing for a different country's national team, for example. South African born Kevin Petersen plays for the English national cricket team. In such scenarios, legal tangles may, at times, prove to be roadblocks for sportspersons in fulfilling their goals and aspirations of playing in the international arena.
Recently there has been a lot of debate and buzz around the National Sports Development Bill 2011 (2011 Bill). The preamble of the 2011 Bill states, the bill has been formulated to celebrate the spirit of sport and fair play, imbibed the philosophy of Olympism.
Owing to the fact that there are several sports federations, authorities and associations in India, like the All India Football Federation, Indian Hockey Federation, All India Tennis Association etc. the Government introduced the 2011 Bill to regulate such federation and associations. The 2011 Bill was introduced not with the intent to transgress into the independence of these sport authorities but with the intent to imbibe the practice of good governance accepted around the world in the Indian scenario. The 2011 Bill seeks to promote sports and infrastructure related to sports in India. Inter alia, the 2011 Bill also seeks to address the issues of sexual harassment, age fraud, impediments to Right to Information, speedy resolution of sport disputes, anti-doping, transparency and good governance. However, the 2011 Bill was recently rejected3 by the cabinet of ministers and has since undergone several revisions4. It is unclear when the bill will see the light of the day.5
Currently, each of these aforementioned federations and authorities have their own set of rules, regulations and byelaws which govern various aspects relating to each sport and the sportspersons associated with the respective sport. At various points in time, these rules, regulations and byelaws are the subject matter of legal interpretation on occasions of disputes between sportspersons inter se or between sportspersons and authorities.
In summary there is a strong need for a central legislation to regulate the conduct of sports, sportsmen and sports officials in India. There is also a clear need for development of legal specialization in the field of sports, given the sheer economics involved in sports today coupled with the move towards professionalization. Contractual and legal disputes in the area of sports are bound to increase in the coming years, and given the unique nature of sports as a profession and the life of sportsmen the disputes are likely to give rise to novel situations. Further, effective supervision and control by the government is much needed, in order for the field of sports to grow systematically and in a healthy manner.
1 http://sportslawyer.in/income-from-world-cup-2011-exempt-is-indian-tax-law-biased-towards-international-sports-federations/ http://www2.warwick.ac.uk/fac/soc/law/elj/eslj/issues/volume2/number1/foster.pdf http://en.wikipedia.org/wiki/Sports_law