High GST has adversely impacted horse racing: TAI

With revenues declining since 2017, the governing body has sought a rate-revision

Horse racing is considered one among the best-regulated sports in the country. The horse industry with its agricultural-connect, supports over 5000 steeds stabled at various centres and over 20,000 livestock accommodated in 50 breeding farms.

The industry consumes feed and fodder produce of over ₹200 crore and in addition, left-over straw is used for bedding of horses. More than 3,50,000 families earn their livelihood through this industry.

The sport is governed under the auspices of six turf clubs in Maharashtra, Andhra Pradesh, Tamil Nadu, Karnataka, West Bengal, and Delhi. Together they form an umbrella body called the Turf Authorities of India (TAI), which promotes the sport.

It may be recalled that the Supreme Court, in a landmark ruling in 1996, had declared horse racing as a “Game of Skill and not a Game of Chance.”

Since July 2017, this industry suffered a financial blow because of the levy of 28% Goods and Services Tax (GST). Prior to this, the average rate was 7.6%.

The revenue for each race club comes from a commission on the totalizator (parimutuel) and license fees from bookmakers.

The Wagering and Betting Act empowers the various clubs to facilitate legal betting on racing.

The high GST has driven betting into illegal channels, leading to a steep fall in the collections (see graphic).

To arrest this fall, the TAI has constantly urged the Centre to levy the applicable GST on only the commissions/earnings of the respective clubs.

“The harsh rate of 28% GST has driven the wagering into illegal channels, thereby denying clubs and governments their share of revenue,” TAI said in a statement and added: “While the interest in the sport still remains, with the footfalls remaining constant, the revenue generation on the totalizator has fallen by 30%.

The need of the hour is to find a progressive solution so that the betting revenues are not driven into illegal private channels.”

Zavaray Poonawalla, chairman of TAI, said: “I remain positive that we will succeed although a lot of hard work and time will be needed to take our efforts to its logical end.”

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Printable version | Jun 6, 2020 10:48:26 PM |

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