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Goods And Services Tax Sends Taxes Racing
August, 12th 2017

The steep hike in betting tax — from 10 per cent to 28 per cent — with the advent Goods and Services Tax (GST), has not dampened the spirits of punters. There has been no fall in revenue for the state from betting – on the contrary, the income has gone up dramatically in July, the first month of GST. Against an average revenue of over Rs 7.9 crore a month, the state fetched Rs 44.4 crore – which is over six times higher than the monthly average.

Earlier, betting was taxed at the rate of 10 per cent and was called the ‘totaliser tax’. Betting happens at the Bengaluru Turf Club (BTC) and in Mysuru (on course), as well as at off-course betting centres. Of the 28 per cent, 14 per cent is Central GST and the other half, state GST.

With the first figures of the taxes (Bengaluru) arriving after the major change in tax regime, betting tax has raised some eyebrows in the commercial taxes department as the once not-so-lucrative segment has evidently turned promising now.

Revenue in the form of betting tax stood at Rs 8.2 crore, Rs.5.5 crore, and Rs 9.9 crore for April, May and June, respectively before GST. On an average, a state commercial taxes department source, explained, was around Rs 7.9 crore. But after GST, at the rate of 28 per cent, revenue from betting tax touched Rs 44.4 crore.

BTC had 10 racing days last month, out which one had been cancelled. Each race day would have 7- 8 races where bets are placed both at on- and off-course centres.

BTC, which is one of the highest-grossing centres, offering great deal of transparency in race and checking malpractices, had an annual turnover of Rs 2,500 crore last year. On any single racing day, it witnesses a turnover of no less than Rs 80 lakh – Rs 90 lakh per race. If the turnover is over a crore, then Rs 28 lakh straightaway goes to the government.

Of the Rs 44.4 crore, the state government’s share is Rs 22.2 crore. Even this is three times the monthly average. With this, the fear – on whether a rise in tax rate would affect revenue – has been alleviated. More interestingly, the tax increase hasn’t stopped those betting on horse-racing.

“GST has proved to be a change-maker also in terms of revenue. We have witnessed a drastic rise in revenue. This is encouraging. Figures from other segments, we hope, will also be positive,” K Raman, joint commissioner of commercial taxes, told Bangalore Mirror.

Although the initial figures have come as a good sign for the commercial taxes department, the BTC is sceptical. The club fears that the steep rise in betting tax, now GST, could take a toll on betting in due course. “We foresee a crash in this segment. A slowdown in the turnover or business means a fall in revenue. We strongly feel the steep rise could affect the entire business by 30-40 per cent in the form of fall in betting and, in turn, revenue to the government,” a BTC official told Bangalore Mirror.

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