MUMBAI: Your
returns on betting at the Mahalaxmi Racecourse will get even less attractive
once the goods and services tax (GST) comes into effect from July 1. This is
because in the new GST regime the government has put horse racing in the 28%
bracket.
It will be
disastrous for the racing industry in India. The city racecourse’s turnover is
dipping every year due to the 20% tax charged by the state government, GST will
prove to be the last nail in its coffin.
Royal
Western India Turf Club (RWITC) chairman Vivek Jain said Mumbai has an Rs 80
crore turnover against Rs 1,900 cr of Bengaluru as the tax paid on betting in
the city is 20%, whereas in Bengaluru it is just 8%. In Hyderabad, the turnover
is Rs 1300 crore as the tax is 15%. All the six racing clubs in India will
struggle to survive once the 28% tax regime comes into play.
The Mysore
Race Club currently pays just 4.5% tax, the corresponding figures for others
are Bangalore Turf Club (8%), Madras Race Club (25%), Delhi Race Club (20%),
Royal Calcutta Turf Club (currently 5% on win and 10% on other pools) and
Hyderabad Race Club (15%). “We have made a representation to the finance
minister, state tax commissioners and GST council members that a 28% GST rate
on the racing industry will slowly kill the sport. It is wrong to perceive our
industry as a rich man’s pastime,” said Jain.
Jain said
the GST on betting should be levied on the club’s margin or commission as it is
leviable on the services provided and not on a bet’s face value.