IPL tickets to cost a bomb post-GST

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IPL tickets to cost a bomb post-GST

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SportsCafe Desk

06/30/2017

The Indian Premier League matches' tickets will be taxed at a hefty 28% after the implementation of GST on July 1st which is the largest amount for any sporting event. Tickets for other sporting events will attract 18% taxes under the new tax reform, unlike their prior exemption from the duties.

While IPL matches were taxed owing to the commercial basis of the tournament (which features proprietary teams in some states while some exempted the T20 league from taxation), IPL matches all over India will attract 28% as taxes on tickets after the implementation of GST. Other sporting events organised by recognised authorities, which in the current scenario were exempted from such duties as they promote sports, will be levied with 18% tax on tickets.

The threshold was originally set to 28%, but a meeting held on Thursday reduced the taxation to 18% with IPL attracting the highest tax slab of 28%. However, tickets priced at or below Rs 250 will be exempted from the tax, but only a limited number of seats in any stadium belong to that particular price range.

Vinay Mruthyunjaya, a chartered accountant said, "It's interesting that tickets priced over Rs 250 attract tax from July 1. This is a significant departure from the current practice of slapping service and entertainment taxes only on IPL-like tournaments, which involve proprietary teams and are organized on a commercial basis. Until now, admission to recognized sporting events was exempt from such levies," reported ToI.

Vinay also suggested that the recent increase in the crowd turnout at sporting events has attracted the government's attention, sensing it to be a lucrative revenue stream.

Further, he pointed out a possible error in the GST draft.

" An attempt is made to distinguish 'recognized sports' from others. But this distinction has been overlooked while stipulating the threshold limit for ticket prices of Rs 250 and lower. In effect, tickets for all events, even if the teams are representing country, state, zone or district and organized by recognized sports bodies federations will now attract GST. If there was no intention to give exemption for recognized sports events, then there was no need for this categorization under GST. Why did the GST Council make a distinction between the two? This matter ought to be re-looked by the finance minister or the GST Council," he said.

"From July 1, 18% GST on sports tickets will come as a big blow to spectators planning to cheer for India," Vinay, also a managing committee member of the Karnataka State Cricket Association said.

Sponsorship contracts will be levied with 18% tax, and if the sponsor is a corporate or partnership firm, they will deduct the tax and hand the remaining amount as the sponsorship amount to the organizers. The existing service tax that is levied on such contracts is 15%.

National Sports Federations, Association of Indian Universities, School Games Federation of India, Paralympic Committee of India, Indian Olympic Association (pertaining to National Games) are among those exempted from sponsorship tax. However, the government has not cleared the air regarding such an exemption for cricket.

However, the taxation reform has levelled the amount of tax levied on IPL in different states and brought it to 28%. Until now, Maharashtra levied a hefty 45% entertainment tax on the IPL matches, while other states have none. In Karnataka, the tax amounted to 25% which included 15% service tax and 10% entertainment tax.

Moreover, personal and professional coaching academies will also be charged with 18% tax.

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