BTC hope for GST relief

New tax regime will hit the sport hard, say officials

With the tax of 18 per cent proposed on horse racing under the new Goods and Services Tax (GST) regime threatening to hit the sport, the Bangalore Turf Club (BTC) officials will be keen to convince the GST Council to offer it a favourable deal in a meeting in New Delhi on Tuesday.

BTC’s CEO Nirmal Prasad and Arvind Jadhav, former chief secretary and a club member, will represent the club in the meeting.

BTC, which pays a betting tax of nine per cent, will be the second-most affected in the country if the tax reform is implemented. The Mysore Race Club, currently playing four per cent, will be the worst hit. BTC is keen that horse racing is not included in the GST.

“GST will have a pan-India implementation. How can you bring GST on horse racing which is existent only in six states –– Karnataka, Maharashtra, West Bengal, Telangana, Delhi and Tamil Nadu? We are going to request the council to keep the sport out of GST at the meeting,” said Ajit Saldanha, a steward.

BTC, popular for functioning in the totalisator system, has a turnover of around Rs 2000 crore. A rise in the tax percentage could result in lowering of the dividends on betting. “The GST is applied on the total turnover and we fear we may have to shut shop. Including the entertainment tax, the BTC pays a total of 11 per cent to the government. If there is a huge increase, then we are in danger of being swallowed completely. We will be thus seeking a 12 per cent tax on the income earned which will help us operate better,” said Saldanha.

The inter-venue betting is also set to be hit as the clubs would be forced to pay less royalty to each other due to financial crunch.  “Racing is not just about punters alone. It involves many aspects and inter-venue better is one among them. The racing industry involves lakhs of people and the spin-off is going to be big. We want the council to take a holistic view at the meeting,” he said.

Finance Minister Arun Jaitley, who is the chief of the GST council, had earlier met the club members regarding the issue.  “We had earlier met Arun Jaitley, the chairman of GST Council. We have given him a 14-point letter pointing to the problems. Let us hope for the best,” added Saldanha.
DH News Service