Making it clear that the existing provisions did not favour compliance to the conditions set by the ICC so that the event could be staged in India, sports minister Sunil Dutt said the game's governing body has been asked to apply to AAR.
"The president, ICC, has been informed by the ministry of finance that the most appropriate course will be to move an application before the Authority for Advance Ruling, which has the exclusive jurisdiction to decide in advance whether incomes arising out of transactions entered into bynon-residents are taxable or not," Dutt told the Lok Sabha.
Introduced under the Income Tax Act, 1961, AAR has been constituted to help tax-payers to plan their tax affairs in advance and to avoid long drawn and expensive litigation.
A non-resident or certain categories of residents can obtain binding rulings from the authority on question of law or fact arising out of any transaction or proposed transactions that are relevant for the determination of the tax liability.
The ICC has asked India to give full exemption to the event failing which it will relocate the elite tournament to Pakistan. The ICC has given India a deadline till June to take a decision.
The Pakistan government has already announced that it will give full waiver to the event in case the country gets the nod to stage the prestigious cricket meet.
Dutt said the Board of Control for Cricket in India (BCCI) has informed about the conditions set by the ICC.
"As informed by the BCCI, the ICC has put a condition that it will not host the Champions Trophy in India unless they are given tax exemption.
"The BCCI has informed that all those countries where ICC hosts Champions Trophy or World Cup had granted total tax exemption to ICC on its earning through sponsorships and television rights as a major share of money earned from these events is spent on development of cricket in 92 ICC member countries throughout the world."
Last week top BCCI officials including its president Ranbir Singh Mahendra had met Prime Minister Manmohan Singh to request for tax exemption to the event.
The Prime Minister had assured that he would look into the matter.