GST on Horse Racing

GST on Horse Racing

GST on Horse Racing

The current article provides a brief understanding with regard to the applicability of Goods and Service Tax (GST) on betting, horse racing etc.

Value of supply in case of Betting, Horse racing etc.

Before understanding the applicable GST rates on betting, horse racing etc. First of all, let us understand the value of the supply. The value of supply in the case of betting, horse racing etc. is to be determined as per rule 31A of the Central Goods and Service Tax Rules, 2017. Sub-rule (3) of rule 31A states that the value of supply in case of betting, horse racing etc. shall be 100% of the face value of the bet or the amount paid into the totalisator. It should be noted here that totalisator is a device which shows the number and the amount of bets staked, to facilitate the division of total among those backing the winner.

Rates of GST

GST Rates on Betting Services

As per entry no. 34 of notification no. 11/2017 Central Tax (Rate) dated 28th June 2017, clearly states that the GST on betting would be 14%. Thus, GST rates in case of betting services would be as under

Type of SupplyGST rates
Intra-state supply (within the state supply)

CGST–14%

SGST / UTGST– 4%

Total GST rate–28%

Inter-State supply (outside the state supply)IGST–28%

GST Rates on Horse Racing

The rates for taxable services are notified under notification no. 11/2017 Central Tax (Rate) dated 28th June 2017. However, the said notification doesn’t clearly state the rates of GST on horse racing.

notification no. 11/2017 Central Tax (Rate) dated 28th June 2017

As per the 25th GST Council meeting held on 18th January 2018, GST rates on horse racing are as follows:

Type of SupplyGST rates
Intra-state supply (within the state supply)

CGST–14%

SGST / UTGST–14%

Total GST rate–28%

Inter-State supply (outside the state supply)IGST–28%

It is interesting to note that in the matter of M/s. Vijay Baburao Shirke, GST AAR Maharashtra has held that in case of receipt of prize money from horse racing conducting entities, the GST payable would be 18% (i.e. CGST–9% and SGST– % or IGST–18%).

The facts related to the case are that Mr. Vijay Shirke owns a horse and such horses participate in different races organised by different clubs. Mr. Vijay Shirke won prize money out of the different horse races. Mr. Vijay Shirke filed an application seeking advance ruling questioning whether the prize money won from horse race amounts to ‘supply of service’ and would be liable to GST? GST AAR Maharashtra in the matter held that the prize money won from horse race amounts to the supply of service.

It was further held by the GST AAR Maharashtra that such activity is not specifically covered under notification no. 11/2017 – Central Tax (Rate) dated 28th June 2017 and hence the same would be classified under entry no. 35 ‘Other Services and Other miscellaneous services (including service nowhere else classified) and would be taxed at 18% GST (CGST 9% and SGST 9%).

Post by Peter

Peter is a Senior Content Writer and Copy Editor in Finance specializing in GST and Import & Export. He has also written articles on Medical, Philosophy, and Literature and published research papers in international journals.