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Turf Authority wants GST revision on horse-racing in India

The Turf Authority of India (TAI) is the primary body for horse-racing in India and comprises an association of six different race clubs across the country. Recently, the TAI has urged the government to reconsider the applicability of the Goods and Services Tax (GST) on horse racing in India.

They made a suggestion to levy GST only on the commission or service fee charged by race clubs, and to exclude the same from the prize money of winners. They also requested the change of the current rate of GST being charged on horse-racing, especially since the Supreme Court declared horse racing as a ‘game of skill’ and not a ‘game of chance.’

The Supreme Court declared the same way back in 1996, saying, “Horse racing is neither gaming nor gambling as defined and envisaged under the two acts (Police Act and Gaming Act).” Currently, 28% is the rate of taxation being levied on betting/wagering on horse races. Since it is not gambling, 18% should be the standard rate of taxation.

With the high rates on taxation currently being charged, illegal betting is being encouraged, which is not only against the law, but it also leads to lesser revenue to the government and of course, to the race clubs in question. This was well pointed out by Chairman and Senior Steward with Bangalore Turf Club Ltd, V Harimohan Naidu.

He also took the opportunity to mention that the Bangalore Turf Club’s revenue during the pre-GST time was around INR 1,900 Crore, which came crashing down to half – INR 850 Crore immediately after GST came into the picture. There’s also a case of other sectors related to horse-racing and breeding being affected.

“If this situation continues, then technically speaking, 10,000 horses are to be put to sleep. Also, approximately three lakhs man days will be lost,” said Zavaray Poonawala, President, Poonawala Group, that operates a stud farm in Pune, Maharashtra. Globally, tax on horse racing is only applicable on commission and the association has asked for the same in India.

For more updates on the horse-racing industry and the overall gaming industry in India, stay tuned to GutshotMagazine.com.

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