As the government is all set to roll out the much discussed GST today at midnight, lets take a look at what it means for the sports federations and the enthusiastic sports spectators. One thing sure to happen is – the spectators will have to shell out more money to enjoy watching a live match in the stadium under the GST regime from July 1.
Tickets for all Sports events will attract up to 28% tax under the GST regime from July 1. Earlier, the service and entertainment tax was levied only on tickets for events such as IPL. The recognized sports events were exempted from a tax as they were believed to promote the culture of sports in the country. But from July 1, all the events organized by the recognized sports bodies such as The Indian Cricket Board and The Hockey Federation will attract a tax of 18%. And tickets for sports events such as IPL, which are high on entertainment, will attract the maximum tax i.e. 28%. However, this will not apply to tickets priced below INR 250.
The one positive of the GST of 28% on IPL, is that it will be the same across all the states. Before, some states levied a heavy entertainment tax (as high as 45%) while the other levied an entertainment tax as low as 10%. The GST roll out will definitely level the playing field.
Earlier all the sports events, even the ones organized by the recognized sports bodies were to attract 28% GST. However, it was pegged down to 18% for events organized by “recognized bodies” after a meeting held on Thursday. This last minute change has brought some respite especially for the cricket followers who otherwise would have had to pay a whopping tax of 28% to cheer the country in the tournaments organized by the BCCI.
“From July 1, 18% GST on sports tickets will come as a big blow to spectators planning to cheer for India” – says Vinay, a managing committee member of the Karnataka State Cricket Association. He said he had even suggested to the BCCI on Karnataka State Cricket Association’s behalf that all games must be granted a blanket exemption from GST. They are yet to hear from the BCCI on this.
About the exemption limit set for the ticket price, Vinay says, for cricket the tax applies almost to the entire stadium as only a limited number of seats are priced below INR 250. The threshold limit of INR 250 is the same for all the sports – recognized and the other. It is surprising not to see a higher threshold for the recognized sports even after a clear distinction made between them and the other kind of sports in the GST schedule. Now, tickets, even for the events that have participating teams representing the country, state or zone will attract GST of 18%.
The tax on professional coaching in sports has been pegged at 18%. There will also be a 3% rise in the tax levied on the sponsorships. Under the GST regime, the sponsorships will attract a GST of 18% as opposed to the 15% service tax that was applied until now. While the National Sports Federations, Association of Indian Universities, School Games Federation of India, Paralympic committee of India and Indian Olympic Association are among the organizations that are exempted from the sponsorship tax. The clarity over the same for cricket is not there.
Time will tell how this change will be perceived by the sports enthusiasts.