Save racing from dying, turf clubs appeal to govt - Shailendra Awasthi | TOI
Posted on - 27 Feb 2019
Save racing from dying, turf clubs appeal to govt
Shailendra Awasthi | TOI
Mumbai:
The Turf Authorities of India (TAI), an umbrella organisation of six race clubs in the country, has appealed to the government to save the racing industry from dying due to unfair and high Goods and Services Tax (GST) of 28 % imposed on it.
A representation was made by the TAI to the Finance Minister Piyush Goel on February 14 wherein the TAI expressed its concerns about the adverse impact of 28% GST and have put forward its objections to various entries in the GST notifications and have requested for their removal.
The body said the GST on betting should be computed on commission and not on total amount wagered by the racegoer. Stating that the Supreme Court, in one of its decisions, had said that horseracing is a ‘Game of skill’ where the winning depends predominantly on skill and does not amount to gambling, therefore it qualifies as Services and not as Goods as wrongly mentioned in the GST notification.
TAI also stated that the total amount wagered is not the income of the club and is liable to be paid back to the winners in the form of dividends. The commission on the wager is retained by the club and it should constitute the taxable income under GST as the services offered by the race clubs are similar to a stock broker or forex dealers.
A comparison of collections before and after GST era to support TAI’s claim that a 28 % GST has badly hit collections at the clubs which in turn has hurt the revenue generated by the government as the racegoer is now betting illegally to save high GST, was also placed. According to TAI, in the pre-GST era, the collections during 2014-15, 2015-16 and 2016-17 was Rs 3274cr, Rs 3611cr and Rs 3954cr respectively. For the given period the applicable taxes were Rs 252cr, Rs 278cr and Rs 305cr respectively.
The above when compared with the transitional period of 2017-18 shows a collection of Rs. 2219cr with applicable taxes amount to just Rs 186cr. Also TAI has contended that assuming 28% GST, the period 2018-19, 2019-20 and 2020-21 will show a collections of Rs 1917cr, Rs 1438cr and Rs 1078cr. Applicable taxes for the same period will be Rs 419cr, Rs 315cr and Rs 236cr respectively. It clearly shows the losses due to high GST.
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