A taxing tale: Time for turf clubs to gallop to court

Picture this yoursquore at Mahalaxmi a race is being run and your heartrsquos racing as you clutch a betting ticket But before your horse even crosses the finish line the taxmanrsquos already wonmdash2837 of your bet poof goneThatrsquos the GST grinch haunting Indiarsquos turf clubs and itrsquos high time the Royal Western India Turf Club RWITC and its Turf Authorities of India TAI pals stopped sulking and started sprinting to court The Kerala High Court just tossed us a juicy bone and with a little Karnataka spice 2021 and some ldquoskill not chancerdquo swagger 1996 we might finally tame this tax beastRenewed hopeLast week the Kerala High Court in a legal plot twist kicked out GST rules taxing clubs for serving their own members Why Because in their words a club and its members are like familymdashyour mom doesnt tax you for cooking and serving dinner This ldquomutualityrdquo logic can also be extended to say clubs arenrsquot some greedy corporation profiting off bets theyrsquore just middlemen pooling puntersrsquo money and handing it back minus a tiny cutSo whyrsquos the GST council treating them like casino kingpins Actually the Karnataka high court 2021 ruling in favour of BTC Bangalore Turf Club accepted this logicIt told the tax folks to chillmdashGST should only hit the clubrsquos commission say Rs 10 on a Rs 100 bet not the whole darn bet Imagine the relief instead of coughing up Rs 28 per Rs 100 clubs could pay Rs 23 Punters would flock back legal betting would boom and our racecourses might stop looking like ghost towns But herersquos the kickermdashthe Centrersquos been dragging its feet and alas that Karnataka win hasnrsquot spread nationwide Itrsquos like winning the Derby but forgetting to collect the trophyNow letrsquos talk horse sensemdashliterally The Supreme Court way back in 1996 Dr KR Lakshmanan vs the state of Madras case said horse racing isnrsquot some dartthrowing contest with a blindfold on itrsquos a game of skill Yoursquore not just tossing coinsmdashyou study form track conditions evaluate trainers skill jockeys form Yet GST lumps us with lotteries and roulette slapping a 2837 ldquosin taxrdquo on every bet This skillversuschance angle is our ace card and the Kerala rulingrsquos mutuality mantra gives it extra muscleGame PlanSo whatrsquos the game plan TAI Stop grazing and start galloping First round up the possemdashRWITC BTC Hyderabad all of youmdashand hire some legal hotshots File a big bold petition in the Supreme Court waving the Kerala and Karnataka flags Argue that taxing the whole bet is like charging GST on bank deposits Like banks the clubs are only temporary custodians of the pool of money Demand GST only on commissions maybe at a friendly 18 per cent so punters donrsquot bolt to shady bookies Oh and dust off that Supreme Court ldquoskillrdquo rulingmdashremind the judges wersquore more Brain Gym than Las VegasDonrsquot just bet on courts though Knock on the GST Councilrsquos doormdashpolitely with data showing how this tax has tanked revenues RWITCrsquos down from Rs 15 crore to Rs 2 crore ouch Pitch a winwin lower taxes more legal bets happier taxmen Get Maharashtra and Karnataka ministers to cheer you onmdashtheyrsquod love the extra cash from a revived racing sceneThe finish linersquos in sight folks The Kerala rulingrsquos our starting gun Karnatakarsquos our tailwind and the skill argumentrsquos our rocket fuel TAI donrsquot let this tax keep stealing our thundermdashsaddle up hit the courts and letrsquos make betting fun againThe views expressed in this article are the individuals and dont represent those of the paperatOptionskeyd0ddb8ef8f1a62a8cdd22fac27fc5ea7formatiframeheight90width728params