Punters given the wrong end of the stick
By Sharan Kumar
The turf clubs have been
punishing the punters in the name of GST. The turf clubs do not indicate the
value of GST and the club commission on the ticket. The punters are in the dark
about how much of their money is the actual bet. The punters are under the
belief that the GST is 28 per cent on the bet value and that the clubs are
collecting the same in addition to the club commission. This has resulted in
the dividends that the punters get becoming very poor.
In reality, clubs like
Bangalore Turf Club are making big money in the name of GST in the absence of
transparency and non-disclosure to the punters. The punters in addition are
charged a high entry fee to generate more income while subsidizing everything
to the members. The turf clubs are collecting GST on bet value but paying GST
on club commission which leaves them with lots of money which essentially
belongs to the punters and the government. Turf clubs are left with a lot more
money than is believed by racegoers.
In the past, the
Bangalore Turf Club had collected a GST of 28 per cent but got a favourable
verdict about their modus operandi. The Bangalore Turf Club reportedly has in
excess of Rs 130 crores which has been collected in the name of GST from
punters but the money has been kept by the club. The money that is left with
the club actually belongs to the punters. The club under such circumstances
should have been using that money to improve facilities for punters and
returned the other cash by way of added money for jackpot and other pools.
The Government of India
has passed a new law with regard to betting on all gambling activities
including horse racing and has mandated 28 per cent of the bet value to be the
GST. The new law is not as draconian if the clubs implement the new GST regime
sincerely. The casinos, online gaming, and horse racing have been brought under
a single category. The clubs are loathe to implement the new regime because
they will not have the luxury of using GST collected from punters and not
remitting the same value to the government.
In the present
dispensation, if a punter bets Rs 100, the actual value of the bet after 28 per
cent GST and six per cent club commission would be Rs 72 (Rs 21.875 as GST, Rs
6.25 as club commission). Some clubs collect Rs 8.25 club commission on win and
place pools and on jackpot, the commission is 24 per cent which means a total
of 46 per cent is sliced out. Since clubs like Bangalore Turf Club are
remitting the GST only on commission, the clubs are left with an excess of Rs
22 on each of the Rs 100 bets. If the new GST regime were to be implemented,
they would not have the luxury of a massive cut. The public sincerely
believes that 28 per cent GST is being duly credited to the government.
Let us examine how under
the new GST regime, the GST that a punter would have to pay could be in the
region of about 9 per cent if he is allowed to rotate his investment. This
would result in the optimisation of GST. For example, if a punter deposits an
amount of Rs 1000 with the tote, the GST that will be deducted will be Rs 280.
If betting is done with the remaining amount which includes the dividend as
well, it will not attract any more GST because the original amount has already
been taxed. There is no double whammy in the taxation system.
It is like paying corkage
for a bottle of whisky at a club where such a facility is available. If the corkage
has been paid, the same bottle can be used until it is exhausted without
additional corkage. In the same way, if the system of making a deposit
inclusive of GST is implemented, the entire amount can be used till it is
exhausted without further tax. There is a possibility that since all types of
betting are being grouped, racing may also get the benefit of TDS under 194 BA
where losing investments can be offset against the net gains.
Comments
Post a Comment