Turf Authorities of India pleads to reconsider GST rates on horse betting

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Amid the struggle of online gaming companies trying to have the GST council reconsider the tax rate for online gaming, the Turf Authorities of India (TAI) has also put forward a plea to the council for reconsideration of GST rates on horse betting.

The GST Council, according to TAI, has failed to recognize the unique characteristics that set horse racing apart from other gaming platforms. Horse racing has been a recognized activity internationally and in India for more than 200 years.

The Turf Authorities of India further explained the impact on user base and revenue due to implementation of the latest GST rates in the 50th meeting of the GST council.

TAI in its plea as quoted by The Hindu Business Line said, “Turnover has dropped by nearly 70 percent from about ₹17,000 crore to approximately ₹6,400 crore during the post GST period, compared to the period prior to introduction of GST.”

As compared to pre-GST period, the patronage has decreased to the point where users are now getting only 50% of the dividends they used to get. Furthermore, the growth of illegal betting platforms has severely damaged the integrity of racing and resulted in significant financial losses for the government and clubs.

With decreasing racing horse owners every year, the agro-veterinary sector that generates ₹300 crore and the breeding industry worth about ₹500 crores are also declining. This has also affected around 2 lakh workers and their employment.

TAI hoping the matter to be reviewed by the GST council

“We conclude with a fond hope that the matter will be reviewed most appropriately, to support an agricultural base industry, as otherwise, the closure of the entire racing industry in the country is imminent and unemployment on a massive scale is unavoidable at all the seven racing centres in the country and about 40 breeding establishments across the country,” TAI said in a press release.

This is the first instance of an industry other than real money gaming (RMG) to have come forward on the recent changes in GST rates. The online RMG industry has also addressed an open letter to the government officials and have asked for a meeting regarding reconsideration on the GST rate.

More recently, CrickPe’s Ashneer Grover also came forward to explain the unit economics of online gaming due to changes in the GST rates on online gaming.