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.

Courtesy http://timesofindia.indiatimes.com