- Court of Appeal quashes IRD decision classifying cricketers as employees
The Court of Appeal has quashed an Inland Revenue Department (IRD) decision that retrospectively classified Sri Lanka’s contracted national cricketers as employees of Sri Lanka Cricket for tax purposes, ruling in favour of more than 50 male and female players who challenged the application of Advance Personal Income Tax (APIT) on that basis.
A bench comprising the President of the Court of Appeal, Justice Rohantha Abeysuriya, and Justice Priyantha Fernando, after an extensive hearing, delivered judgment quashing the decision made by the Inland Revenue Department (IRD) classifying national cricketers as employees of Sri Lanka Cricket for tax purposes with retrospective effect.
The Court of Appeal pronounced judgment in open court, where most of the national cricketers were present.
The entire group of contracted cricketers, male and female, through their Captains, challenged the IRD decision, effective since October 2024, which had retrospective application, classifying national cricketers as employees and, on that basis, effecting the applicability of Advance Personal Income Tax (APIT) to the cricketers.
The cricketers argued in court through their petitions that they are not employees and that, for many years, they were recognised as independent service providers and tax collection should be effected in the manner applicable to independent service providers.
Counsel appearing for the male cricketers, Nishan Sydney Premathiratne, for and on behalf of the cricketers, said: “First and foremost, the cricketers and myself and our legal team are immensely thankful to the Lordships of the Court of Appeal for an extensive hearing on the matter. At the time this action was instituted, there was a misapprehension in the public domain that this case was instituted by the national cricketers to avoid taxes, which was incorrect, and such misapprehensions were unfair to them. However, that position was in fact wrong and cricketers were challenging a wrongful classification where they were, by an overnight decision, classified as employees of Sri Lanka Cricket for the purposes of the applicability and collection of Advanced Personal Income Tax.
The cricketers were withheld professional contractual payments for several months owing to the retrospective nature of this decision. The cricketers were not beneficiaries at any given time of any EPF, ETF, gratuity, or any other employment benefits or annual leave or maternity leave which general employees are afforded, whilst cricketers had extreme uncertainties in relation to their contracts with Sri Lanka Cricket. More than 50 national contracted cricketers, both male and female, placed their grievances before Court through affidavits.”
Premathiratne appeared with Attorneys Shenali Dias and Sidath Gajanayaka, on the instructions of Gamindu Karunasena, for the petitioners representing the male cricketers.
President’s Counsel Dr. Harsha Cabral, with Attorneys Vikum Jayasinghe and Manith Dasanayake, on the instructions of Gamindu Karunasena, appeared for the petitioners representing the female cricketers.
Deputy Solicitor General Manohara Jayasinghe appeared for the Attorney General, representing the Inland Revenue Department.
President’s Counsel Kuvera de Soyza, with Attorney Sajana de Soyza, on the instructions of Sanjay Fonseka, represented the former members of Sri Lanka Cricket.
