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 28

th 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 Supply	GST 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 28

th June 2017. However, the said notification doesn’t clearly state the rates of Gst On Horse Racing.

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As per the 25

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

Type of Supply	GST 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%).

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Frequently Asked Questions

Common questions about GST on Horse Racing and Betting Services in India.

According to Rule 31A(3) of the Central Goods and Service Tax Rules, 2017, the value of supply in case of betting, horse racing, etc. is 100% of the face value of the bet or the amount paid into the totalisator.

For intra-state supply of betting services, the GST rate is 28%, comprising 14% CGST and 14% SGST/UTGST.

For inter-state supply of betting services, the GST rate is 28% IGST.

No, the notification no. 11/2017 Central Tax (Rate) dated 28th June 2017 does not clearly state the rates of GST on horse racing.

According to the 25th GST Council meeting held on 18th January 2018, the GST rates on horse racing are 28% for both intra-state supply (14% CGST and 14% SGST/UTGST) and inter-state supply (28% IGST).

In the case of M/s. Vijay Baburao Shirke, the GST AAR Maharashtra held that the receipt of prize money from horse racing conducting entities would be subject to 18% GST (CGST 9% and SGST 9% or IGST 18%).

The GST AAR Maharashtra ruled that the prize money won from horse racing amounts to the supply of service, and since it is not specifically covered under notification no. 11/2017 – Central Tax (Rate), it would be classified under entry no. 35 'Other Services and Other miscellaneous services' and taxed at 18% GST.

Yes, according to the article, there is a difference in the GST rates for betting services and horse racing. While betting services are clearly taxed at 28% GST, the rates for horse racing are subject to interpretation and AAR rulings.

A totalisator is a device that shows the number and the amount of bets staked, to facilitate the division of the total among those backing the winner. The value of supply in case of betting, horse racing, etc. is 100% of the face value of the bet or the amount paid into the totalisator.

Understanding the GST rates on betting and horse racing is crucial for businesses and individuals involved in these activities to ensure compliance with tax laws and avoid any potential penalties or legal issues.