KKR pads up for amusement tax sop in West Bengal

While Shah Rukh Khan, who agreed to become the brand ambassador of West Bengal in February, will not charge a penny for this, this magnanimous gesture has strengthened the case for his Indian Premier League team, Kolkata Knight Riders, to get amusement tax exemption from the state government.

While the exact quantum of benefits from this exemption is yet to be calculated, last year KKR paid Rs 25 lakh by way of amusement tax to the state government. Besides, KKR paid Rs 35 lakh to the Cricket Association of Bengal for matches played at Eden Gardens.

...

"We hope we will get exemption from paying amusement tax on tickets priced over Rs 1,000," said a KKR official. The amount, though not huge, would mean a substantial profit for KKR in the long run, based on benefits accrued over the years.

The government has already given its approval for tax exemption on tickets priced at Rs 900, enabling the ticket prices to go down to Rs 750. This, said KKR officials, would help attract more crowd to the IPL matches. The amusement tax issue, incidentally, had been haunting KKR since the beginning of IPL.

...

Shah Rukh Khan had asked the previous Left Front government in Bengal for tax exemption, only to be turned down. This led to tensions between the team and the government.

The then finance minister, Asim Dasgupta, also made an allegation against KKR saying the franchise was fudging the ticket prices and selling these at prices higher than what was quoted, in order to save on taxation.

West Bengal Sports Minister Madan Mitra said while he would not comment on the topic, the announcement by Chief Minister Mamata Banerjee waiving amusement tax exemption for KKR was final.

...

"There can be nothing to contradict the CM's announcement. We have tried to make things easier for the crowd by providing more buses and ferries. I cannot say whether or not the tax exemption is linked to the actor becoming the brand ambassador of the state," Mitra said.

Pegged at Rs 300 crore (Rs 3 billion), the KKR is the second-most valued brand in the IPL. While the team has never been in the IPL finals, the franchise made profits of Rs 13 crore (Rs 130 million) in the first season itself.

Since then, riding on the back of Khan's marketing skills, the team has remained in demand with sponsors as well. It currently has 10 sponsors.

...

Other teams have also made attempts to get the amusement tax exemption. "We pay taxes of about Rs 3 crore (Rs 30 million) a year to the Delhi government. A tax exemption would mean a huge breather for us," said a Delhi Daredevils official.

Shah Rukh Khan, who runs Red Chillies Entertainment, has decided that this year KKR cheerleaders will don sarees instead of skirts and dance to the tunes of Rabindra Sangeet, in a bid to project the state's culture.

However, questions were raised about his link with the state when he was made the brand ambassador. For SRK, owning KKR is the most important connect.