GST rate on Betting on Horse race

[Shyam Naik]

Dear Experts,

Kindly opine, what is the tax rate for Betting on Horse Race Service?

The service by a race club by way of totalisator or licence to Bookmaker is taxable @28% vide SAC 9996. It appears that it covers services by the race club, and does not include any service by a licensed Bookmaker.

Further, it appears that there is demacration between gambling and betting. Gambling is purely a game of chance, where as betting involves element of knowledge, skill etc, although, element of chance is not completely rulled out, is a game of Skill. The history, biography, strength, stamina, fitness etc of the horse and jockey is taken into consideration by the wager, while betting in Horse Race. Most of the state legislatures exclude Betting on Horse Race, from the statutory definition of gambling. Accordingly, it appears that the betting service in relation to Horse Race may not get covered under Heading 9996 : Gambling attracting GST of 28%.

It appears that the service of betting on Horse Race by a Bookmaker may get covered under tariff heading 999692(Being not gambling but betting).

Thank You.

With due regards,

Shyam

[Rajagopalan Ranganathan]

Sir,

Vide Sl. No. 34 (vi) of Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 which refers to "Recreational, cultural and sporting services and falls under SAC 9996." In my opinion betting on horse race can be classified as a recreation and hence the same is chargeable to CGST @9%.

AI Summary

Classification of betting on horse races as recreational service affects GST treatment under the relevant rate notification. The operative issue is whether betting on horse races is classified as gambling or as a distinct betting service and whether bookmaker or race-club services fall under the service classification for recreational, cultural and sporting services in the applicable rate notification, which would make those services subject to the concessional central GST rate provided for recreational services.