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Long term solution is the only answer on GST issue - By Vivek Jain | TOI

Posted on - 11 Jan 2018

Long term solution is the only answer on GST issue
- By Vivek Jain
 TOI
 
The New Year gift, with the start of racing at Bangalore, was a perfect start to the year, but the ‘tax’ing issues remain a source of concern for the sport.
 
It was good to see several chairmen of other turf clubs, with whom I have worked closely, assemble at the Mahalaxmi on the first race day of 2018. At the top of the agenda of the Turf Authorities of India (TAI) I believe, was the contentious issue of GST. After speaking informally to several club heads, it appears TAI would like to stay with their decision of paying GST to their respective states on their earning (or commission) and not on the face value of the bet.
 
At the request of TAI, I headed discussions with the Centre and several meetings were held from the Finance Minister of India to state tax commissioners and finance ministers before the GST roll out. The Ministry of Finance through TRU, as recently as January 4, reiterated that GST is payable on the face value of the bet, stating the clear intent of the council. BTC and HRC have already been served notices it is gathered.
 
The RWITC’s decision to pay tax on its fixed odds (FO) at 10% is a gamble and has obviously resulted in a surge in FO betting. Whether this will hold water is the real challenge ahead and indeed, if it does stay, would be the only way to bet on the tote.
 
GST was hoped to be the savior of race clubs. Sadly, the sport has few sympathisers outside its narrow fraternity and our plea for a reasonable tax got no support from the vast majority of non-racing states at the GST meetings as also at our being viewed as a “gambling” sport which went against the social aims of the state.
 
In letter and often in person, we represented that the new GST rate ought to be revenue neutral (the all India betting tax average of 9% pre GST has now being upped to a whopping 28%) and I had even suggested dual rates (as in case of lotteries) with a lower rate for the tote.
 
To get relief from the GST Fitment Committee is the only long term solution, however difficult it may seem. That TAI has desired to interpret GST policy on a hope and prayer is possibly seen by it as the only way to salvage the dying finances of the sport.
 
The moot point is, can TAI’s decision, which on the face of it is risky, even though well intentioned, but is not in consonance with the clarifications of the council, sustain?. This can potentially invite litigation for clubs, including the RWITC, whose finances are already under serious stress.
 
(Disclaimer : Views are entirely that of the correspondent only and RWITC takes no responsibility for the same)

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