GST on horse racing: Turf Authorities welcome the decision to defer

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The Turf Authorities of India (TAI), which conducts horse racing in India, has welcomed the GST Council’s decision to allow the group of ministers (GoM) to re-examine the issues related to levy GST on horse racing.

The council will meet again in the first week of August to decide on the issue. The GoM recommended that for horse racing GST be levied on the full value of bets pooled in the totalisators and placed with the bookmakers.

The horse racing clubs, primarily in major metro cities, are all non-profit, support the jockeys, the horses, equestrian breeding and training, besides providing employment to thousands across India.

Zavaray S. Poonawalla, Chairman, (GST reform cell of TAI), in a statement, said “We are happy to note that the GST Council has deferred its decision on imposing GST on the value of bets placed @28%. We look forward to the GoM considering how horse racing is different from other gaming,” reported The Hindu.

Also read: Central government files appeal against Karnataka HC horse-racing GST order

“This gives us a window of 15 days to present to the GoM that unlike gaming for commercial gain, which is undertaken by other service providers, all race clubs in India are set up as not-for-profit clubs. The licensed horse race clubs have been in existence for over 200 years in India and in the span of their operations of over two centuries, the tax imposed on betting has been on the commission made by the race courses and not on the value of bets.”

“The proposed GST would be against this centuries-old norm, international norms and even the state’s betting and entertainment tax, which the GST regime subsumed. All over theworld, payouts/prize money on horse racing is not taxed. This should definitely be applicable to the horse racing industry in India too.”

The TAI further stated, “Unlike commercial gaming, all revenue made by the clubs is completely ploughed back into the welfare measures like supporting jockeys, horses, equestrian breeding and training, besides providing employment to thousands of people.”

“The GoM needs to be cognizant of the fact that horse racing and equestrian breeding will suffer irreversible damage, if the proposed GST on value of bets is imposed. Besides the loss of revenue to the Government of India, it would have a cascading effect on India’s environment, considering that the turfclubs provide much needed green spaces in the crowded cities.

The sport generates lakhs of jobs in the agriculture sector, pharmaceutical industry, and labour industry etc. No value can be attributed to the above in terms of money and the GoM needs to consider the same while taking its decision, which should not be made with only a monetary outlook.”