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Gst On A Game Of Skill--sc Decision

By Iimblue | 14-Nov-2022

  Last week Hon. Supreme Court of India upheld an earlier decision by the Punjab & Haryana High Court, stating that fantasy sports ( ex: Online Rummy, Poker, e-sports etc.) are a game of skill and not chance. 

In India game of skill attracts a GST of 18.?, while winning from the game of chance mandates paying 28? GST. 

More than two decades back, Justice Kuldeep Singh gave a clearcut judgement declaring Horse Racing as a game of skill.There is also a  Karnataka Court judgement regarding the 18? GST but an appeal is pending before       S C. 

 For the record,there are 400 gaming startups in India and  they have successfully taken the matter to its logical conclusion. 

Race Clubs, it appears, do not care one way or the other  !

Post Your reply

13 Replies

Raghavan said ...

20-Nov-2022

Ramoji Rao,

There is no point in arguing with IIM Blue.  He desires that the stewards should on their own start deducting 18% GST instead of 28%.  He says there is a Supreme court ruling and stewards will be not violating any law even if they disregard the orders of GST council.

Than God!  The stewards are not as genius as IIM Blue.

******

Let us look at the decision of Karnataka High Court on this issue.  Of course the decision has been stayed. But, what would have been the position if the GST council has not appealed & issue orders to all turf clubs accordingly?

28% gst on the club commission.  What is the club commission?  I do not know.  Let us presume that it is 5% for win/place and around 20% for exotic & multileg pools.  So, for 1000/- bet, the club commission for bet on win/place pools is 50/- and the GST 14/-.  So only 64/- deduction?   Then no one will be betting with bookies!  

Ramoji Rao said ...

18-Nov-2022

Raghavan garu, the born winners live in a different world far removed from reality. They consider themselves supreme.

Raghavan said ...

17-Nov-2022

IIM Blue,

I know this much.  From my bet,  the system deducts the GST & club commission and indicates the probable dividend in the CCTV.   Same is the case in respect of any other punter.  I bet voluntarily agreeing to the rules framed by the GOI and turf club.

This is ground reality.  Of course, to you this may sound as spreading negativity.  What can I say.  You are public spirited messaiah.  Spread positivity to your heart's content.

*****

The club treats every punter equally.  It does not care whether it is Raghavan or IIM Blue who is punching the ticket/s.  It recovers the GST payable from each and every punter.

*****

You want the stewards to start deducting gst at 18%.  Well.  Stewards are supposed to collect GST  28% & remit the same to the treasury.  They are doing precisely that.   The stewards have no desire to pay hefty fine or spend some time in prison by deducting 18% gst, when they are ordered by the GST council to collect GST at 28%.

Ramasubbu,

You are speaking morals.  I am speaking Law.  I have as much sympathy to a punter as anybody else. Even I want that GST on betting on horses should be in lower slab.   If the GST is 12% or 5%, then I will get higher dividend whenever my bet passes.

 But, there is Law.  Which orders the stewards to collect 28% gst from every bet.  You are saying that the 28% is unfair, unreasonable.   You can definitely register your grievance.  You can file a PIL.  You can even mobilise 30 to 50 punters who subscribe to your views and present a memorandum to the stewards & GST council. 

But, till the PIL, memorandum are settled one way or other by the competent authority, you should pay the GST 28%.  

Law is binding on every punter.

Iimblue said ...

17-Nov-2022

Being drenched in negativism is one thing ; spreading the negativism all-round, is another !. Best to stay away from negative people. 

  1.GST of 18? is applicable on all games of skill, as per the S C ruling. Why the Clubs can not reduce the GST to 18? from 28? forthwith? 

2.There is every case for TAI to pursue the matter of charging GST on commission and not on the betting amount. The punters have been subjected to this huge deduction for the last five years. They will continue to be penalized, till the case is decided. Even if the ruling comes in Punter's favour, the amount already deducted is not going to be returned to them. Why,for some, Punter's money, is not Public money?? 

Should not the injustice be fought at every stage??? 

Of course, the negative person will argue that, what is gained, will also be surely lost  ! A typical born losers argument!! 

Ramanujan said ...

16-Nov-2022

@Ragavanji

It is unfortunate that there is a tangential twist to the point of focus I was trying to make.  The competence of government /Parliament and the compulsion to abide by such decision has never been put into question. Nevertheless, thanks to the democratic air all of us we happen to breath as citizens we do have not merely a right, but duty bound to evaluate and ventilate at least freely views on the fairness or otherwise in a forum of our choice as and especially when opportunity arises. Filing a PIL is yet another option open and reserved for the pretty muscled. 

Yet another issue brought in is tax on boozing stuff in comparison to punting. Is it not audacious to suggest that securing moral good as an excuse by way of imposing unfair penal taxes is good enough to work and stay viable to achieve the utopian goals of course correction of its citizens?

Dealing with the bolts and nuts of punting in the case of punters, the following queries cry for sound answers without recourse to ‘take it or leave it’ attitude:

1)    A punter bets at the ticket window. Is he a consumer at this stage? If so what does he consume, a small piece of acknowledgement slip quoting his nominations?

2)    If his nomination loses it turns to be a wastepaper. On the other hand, the nominations being correct he turns a winner entitling him to be labelled as legitimate consumer as something to go by for the transition in status.

3)    The loser on the other hand reconciles to his karma and rests. On a sharp contrast the boozer on the other hand has some physical product (good or bad to be decided by him) in exchange for money shelled out.

How is it fair and ethical to collect tax the eventually loser guy providing no scope for refund whatsoever. No need to quote lottery ticket issue. I’m aware the argument is extendable thereto.

Cheers   

 

Raghavan said ...

16-Nov-2022

Ramanujam,

Punters are charged 28% gst for betting.  They feel the Government is fleecing them by charging such exorbitant gst.  Well.  Do not bet.  Not a paisa will be demanded by the Government.

In this country of 135+ crores, less than 2 lakh are involved in the game of horse racing.  The winners are bookies, Government, stake holders & the turf club. 

The punters voluntarily hand over their cash to the bookies expecting horse "x" will win or finish shp/place.

The Government does not like the punters to lose,their hard earned money.  It penalises the punters with high rate of gst in the hope that the punters may stay away from betting because of such heavy tax burden.  Those punters who opt to quit betting are thus saved from paying high gst.  But, such wise fellows are not even 1% of the total punters.  The remaining 99+% punters are continuing as punters and coughing up the gst as demanded by the Government grudgingly.

******

The same is the case with alcoholics & smokers.  Government is taxing drinkers & smokers heavily.  We can expect some relief for punters only if the Government reduces tax on liquors & cigarettes.  It may be mentioned here that there are teetotalers & non smokers in high numbers (several crores).  The Government is not asking them one rupee tax.

******

Punters are faulting the Government endlessly.  They are abusing the Government.  They paid the GST demanded till June 2021 (almost four years). 

Then came the ruling by the Court that the GST should be applied on commission charged by the turf club/s.

All punters welcomed the judgement.  Because it gives them some relief.  I warned the punters to withhold the excitement till the GST council accepts the court ruling and issue orders to the turf clubs.  And I was ridiculed by some punters (including IIMBlue, the author of lead post) for not seeing the positives of the Court order and airing something negative unnecessarily.  

******

The GST council as expected, appealed against the Court order.  The matter is to be heard by the full bench of Karnataka High Court.  It is guaranteed that the High Court will take up this case only at its convenience.  This is not life & death question.  And, even if the Karnataka HC gives ruling to the benefit of punters, the GST council has the option to appeal in the Supreme Court.  And, Supreme Court ruling may not come for another 10 or 15 years.

Well.  Currently there is status quo.  If you want to bet, cough up the 28% gst.  And, this situation may continue indefinitely.  Punters who are betting with bookies are having no problem.  The bookies are illegally charging them 10% only as before. 

Only tote punters are put to huge inconvenience.  That can not be helped.  The GST law is binding on all punters.  

Till the Government modifies the gst slab for betting, you must and should pay gst.  That is the Law of the land.  Absolutely no escape.  If you stop betting, that much revenue is lost to the Government.  But, the Government is more than happy to accept such loss with double pleasure.

You can move to heaven & earth.  No one will be impressed.  You may say that Government is unreasonable.  That is your view.  The GST Law is passed in the Parliament.  Full stop.

Ramanujan said ...

16-Nov-2022

I’m tempted to wonder whether any of the gaming ventures proclaiming skill match strides with punters’ thanklessly back-bone role voluntarily opted to carry on their heads and foster the industry. Talking about the industry it hardly needs emphasis that it holds under its belt a whole lot of eco-friendly and socio-economic activities involving creation of huge farms of horse-rearing and associated fodder production activities not to speak of the flowing therefrom the tremendous fountainhead opportunities for both of rural and urban labour-orientation. What is the trigger?  Is it happening what it is because of just love for animals and the socio-economic benefits on the horizon?  The very fact that the visible stakeholders have not effectively come forward to address the GST issue for suitable redressal provides enough explanation. Reality lies in the fact that the punting community unwittingly playing the role of not merely pledging assurance but additionally incentivising  the seemingly visible stakeholders with profits of significant magnitude. With no malice whatever the point being tried to be highlighted here is the punters are the unacknowledged springboard donors for the whole lot of industry filling relentlessly industry’s Hundi with their contributions a portion of which is going to serve the cause of socio-economic benefits as in the case of any recognised trust bodies providing for tax-relief to donors. Here I know I run the risk of being on the spot misinterpreted and heckled for seeking tax relief for bets placed.  The Highlight attempted here is how a punter, cursed for life-time duration, is being treated unfairly also in the form of GST serving just as ‘my pound of flesh’ leaving a helpless moan in the lips ‘ you too Brutus!’

Let us keep in tact our cheers yes

Cheers

Sun said ...

16-Nov-2022

Perhaps in other games only player's skill counts and no other individual is involved Racing Animal,Trainer and Jockey are involved 

Raghavan said ...

16-Nov-2022

Ramsubbu,

Is betting a game of skill?  Or it is a game of chance?  Let us be clear about one thing.  It is neither.  

In our country, what Supreme Court has said is right.  On that argument we may agree to the ruling that betting on horses is a game of skill.

In reality, betting on horses is nothing but gambling.  That is my view.  I am also of the opinion that if the SC hears a review petition, then it may modify their own ruling that it is gambling 100% OR 50% skill & 50% gambling.

People do not enter the race course when there are live races or off course races for entertainment or to test & apprise their skill.  They come with the expectation that their cash balance may be doubled or trebled.  And whether they succeed in their effort or surrender their money to bookies will be known by evening.

Ramsubbu said ...

15-Nov-2022

Hi, 

In my opinion whatever the court declares as racing is an game of chance or skill, each and everyone who plays in racing it's not a game of skill at 100 percent or game of chance even at 50 percent, 

It's easy for analiyising for any officials as long as they gain money as gst, it doesn't mean they indirectly says don't play, it's a direct word if you can play with money with someone then why not me pay me and do whatever and we don't care what you gained or loss this is gst in horse racing, 

I always wondering what if a horse runs for 40p for a win or place and if the government needs 28 per as gst , now just think who will get benefit, but thanks for racing world uncertanities as they trained as most time hot favourites will not win or won't even at board the matter of fact gst on favourites will not affect people like me, 

No matters racing will not be stopped by govt as long as they earned, now the question is between bookies and punters, if the bookies ready to accept any slot of gst then racing will not be fair to punters, this will reflect with less number of punters in racing, day by day it  be will quited by the so called punters, thus will be the end of beautiful sports, if everyone needs money from punters and a punter is still traited in name of sports question of gst will be ended 

Punter Since 1999 said ...

15-Nov-2022

 Not just GST  but the entrance ticket of rs 150 is big Big loot which is so bad and shows how poor the club's and government have become. God be with small and poor punters,

Veteran Punter said ...

14-Nov-2022

It is wrong to say that TAI and race clubs did not put in efforts to get the GST slab on racing reduced to a lower grade, but the powers that be hardly paid any heed to them.

You cannot expect the TAI and race clubs take on a goverment that has absolute majority n the parliament and they can do as they will and that is what is happening.

Either you buckle down or get broken. That is the only two options the present dispensation provides.

How can one blame the turf clubs under those circumstances.

Raghavan said ...

14-Nov-2022

The Karnataka HC has ruled that gst should be applied on the commission the club has received.  The GST council has appealed.  I have not heard any further development. People who are having clear idea about where the matter is pending may please share that knowledge with horse talkers.

It seems the matter now has to be heard by full bench of the Karnataka High Coiurt.

Betting on horses is not at all an urgent matter.  The Courts can take their own time.  As such the Courts are burdened with thousands of pending cases.  They are not sitting idle.  No one can make out a case for quick hearing of the GST slab on horse racing.

Even if the full bench gives its ruling in favor of punters, the council can appeal in Supreme Court.

So do not expect any good news in the near future.

******

Is taxing on bet value is unfair, unreasonable?  May be.  But, our words have no value.  The matter has to be settled by the High Court & High Court ruling should be upheld by Supreme Court.

Till then only one remedy.  Stop betting.  No one will ask you one paisa tax. If however the pull of betting is too strong, then pay the tax as per Law.  (OR BET WITH BOOKIES).

*****

I was betting on win/place.  But, after introduction of GST, I am betting only forecast pool.  Small amount.  Returns do not add up to lakhs.  In fact, the strike rate itself is less than 15%.  But, I am happy with whatever returns that I get.

TO ME, THE GST SLAB IS ABSOLUTELY NO PROBLEM.  I WILL DEFINITELY WELCOME IF THEY REDUCE THE GST RATE.  BUT, TILL THEY DECIDE TO MODIFY THE RATE, I WILL EITHER HAPPILY PAY THE TAX DEMANDED.

*****

To be fair, the logic of the Government is reasonable.  They do not want its citizen to ruin themselves by indulging in betting on horses.  So to scare them from betting they fix the highest slab.  Punters count may be less than two lakhs.  The Government want the punter count to be zero. 

So, punters have no option.  The Law is binding on them.  Is it ethical on the part of Government to fleece punters?  Well.  We can debate on that aspect endlessly.  And, there may be consensus that the Government is unreasonable.  O K.  The Government is not worried about the thinking of punters.  

******

One more aspect is that even if the Government reduces the GST rate, punters may not benefit from that.  Let us say, one is betting 2,000/- & pays 560/- gst.  If the Govt reduces the GST to 2%, the same punter will bet 2500/- and pay gst 50/-.

*****