Turf clubs worried over GST ‘hurdle’

M Somasekhar Hyderabad | Updated on January 11, 2018


Say high tax rate will hit revenues, drive sport to illegal betting mafia

Turf clubs, which promote horse racing — popular mostly in South India and to an extent in Maharashtra, West Bengal and Delhi — are a worried lot.

Causing them — and punters and race horse owners — concern is the rather high 28 per cent tax rate they face under the new GST regime, expected to kick in on July 1.

“Horse racing will get severely impacted, revenues to the government will fall and the move will drive betting into the hands of the illegal betting mafia,” said R Surender Reddy, Chairman of Hyderabad Race Club Ltd (HRC).

In States where the betting tax rates are low at present, the governments tend to garner higher revenues. For instance, in Karnataka, the rate is 8 per cent and the Bangalore Turf Club, on a turnover of ₹1,926 crore, paid the State government ₹154.10 crore in 2016-17. Similarly, in Telangana, the rate is 7.32 per cent and, on a turnover of ₹1,271 crore, the State got ₹93.10 crore.

On the other hand, Tamil Nadu at a high tax rate of 21 per cent, got just ₹7.4 crore on a turnover of ₹35.68 crore.

The 28 per cent tax proposed under the GST will significantly hit the racing industry, said Reddy. It will lead to heavy retrenchment, as major race clubs provide direct and indirect employment to several thousands. HRC employs about 2,500 people, of whom 900 are women, he pointed out.

Game of skill

He argued that the Centre’s move could kill the sport. It may also affect other equestrian games that are recognised by the Olympic Association. “You cannot equate racing with lottery. The Supreme Court had clearly said racing is a game of skill and in not gambling,” Reddy contended.

HRC put forth its case with the Telangana government recently, urging it propose a lower tax rate at the GST Council.

Horse racing as an agro veterinary-based industry supports agriculture by way of consuming about ₹500 crore of agriculture produce such as oats, bran, lucerne, Rhodes grass, etc, the representation stated.

Published on May 22, 2017

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