Turf officials urge Piyush Goyal to lower GST on horse racing

The Turf Authorities of India (TAI) have approached Union Minister Piyush Goyal to request a change in the Goods and Services Tax (GST) rate on bets taken by race clubs and bookmakers. The current 28% GST rate is charged on the face value of the bets, rather than the commission or earnings by the club, which TAI believes is unfair and resulting in a significant loss of revenue.

TAI argues that the classification of horse race betting as a good instead of a service, and under the category of gambling, is incorrect. They point to a Supreme Court decision which holds horse racing and betting on it as a game of skill and exempt from the definition of gambling.

Before the implementation of GST in the financial year 2016-17, the total taxes paid to various state governments amounted to Rs. 305 crores. However, in the transition period of GST implementation in 2017-18, the taxes paid reduced to Rs. 186 crores. TAI predicts that revenues will continue to decline in the subsequent years due to the high tax rate, leading to reduced turnover of race clubs and less tax collections for the government.

The impact of the 28% GST rate is not only affecting horse racing clubs but also the lottery industry, which has seen a significant reduction in business and job losses.Last December, the Mumbai police raided and arrested race course bookmakers and lottery parlour owners for alleged evasion and non-payment of GST. Additionally, tax authorities have raided and imposed evasion cases against several top lottery marketing and distribution companies.

These issues have prompted TAI to seek a revision of the GST rate with the hopes of boosting the turnover of race clubs and preventing further job losses in the industry. The representation made to Union Minister Piyush Goyal highlights the urgency of addressing the negative impact of the current GST rate on the betting industry in India.