GST: Watching IPL matches in stadium will be costlier

BENGALURU: Your next outing to a sports stadium to watch a game will burn a bigger hole in your pocket as tickets will attract up to 28% tax under the GST regime from July 1.

Club culture in sports - like the Indian Premier League which is a mix of entertainment and huge prize money - will attract the highest tax slab of 28%. All other events organized by recognized sports bodies like the Indian cricket board or the hockey federation will attract 18% on tickets. Tickets priced below Rs 250 are exempt from GST. In any stadium, only a limited number of seats are reserved in this price band.

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All sports events organized by recognized sports federations were to attract 28% GST, but a meeting held on Thursday decided to peg it down to 18% for "recognized sporting meets". If it wasn't for the last-minute revision by the GST Council, then Tests, One-dayers and T20Is conducted by the Board of Control for Cricket in India and events by other recognized sports bodies would have been taxed at 28%.

(TOI Photo)

Vinay Mruthyunjaya

, a chartered accountant, told TOI: "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."

Exemption for recognized sports events has been the practice as they are conducted by recognized bodies like BCCI. They are involved in the promotion of sports and the playing teams represent their countries. For instance, Karna taka had long waived 10% entertainment tax for cricket matches and levied it only on IPL-like events. "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.

The committee member said he had suggested to the BCCI a few months ago on

KSCA

's behalf that all games must be granted blanket exemption from GST. "We are yet to hear from the BCCI on this," he added.

Vinay said that with spectator participation increasing in recent times, the government has sensed a revenue stream waiting to be tapped. It is evident in the low threshold limit set for GST exemption. For cricket, the tax applies virtually to the entire stadium as only a limited number of tickets are priced Rs 250 or less.

Vinay pointed to a possible drafting error in the GST schedule. " 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.

IPL cricket fans at Mumbai vs KKR at second playoff match at M Chinnaswamy stadium in Bengaluru. (TOI photo)

Coaching too will pinch

Sponsorships attract 18% tax. If the sponsor is a corporate or partnership firm, they deduct the tax and hand over 82% of the sponsorship amount to the organizers. Existing service tax was 15%; hence, rise is 3%

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. Question mark over cricket continues

GST of 28% on IPL has levelled the playing field. Some states like Maharashtra (45%) levied hefty entertainment tax, others states had none. In Karnataka's case, the service tax (15%) and entertainment tax (10%) components came to around 25%. With GST, the increase is a mere 3%

Tax on professional coaching and private academies pegged at 18%