Mumbai: Sin tax could just cripple the racing horse

Turf club administrators across the country are losing sleep and for good reason If a recent viral WhatsApp document mdash purported to be the GST draft mdash is to be believed horse racing could soon be grouped with tobacco and therefore may attract lsquosin taxrsquo at the rate of 40 per cent This could be the final nail in the coffin for a sport thatrsquos incurring heavy lossesHorse racing in the city is already reeling under the various taxes and the ongoing cash crunch File picThough yet to be authenticated the documents which have been widely circulated in the racing fraternity have started causing concern amongst racing bigwigs who fear that more tax could prove to be the death knell of horse racing in IndiaVivek Jain chairman of the Royal Western India Turf Club RWITC currently in Dubai acknowledged that he had heard about it but not seen it yet ldquoI reserve comment until I see it the draft pagesrdquo he said on the phone but did add ldquoIf true this would be very serious I had written to my counterparts in other clubs that we need to be united to tackle this issue but unfortunately some of them feel it would be too premature to take it up at this stagerdquoIn what appears to be a 163document going by the pagination mark at the top of each page horse racing has been referred to on pages 11 and 12 under Item 17 which gives out the definition of ldquobusinessrdquo Under clause 17 h the document mentions ldquoservices provided by a race club by way of totalisator or a licence to bookmaker in such clubrdquo sicClubs in soupRWITC is already in deep trouble due to exorbitant betting tax 30 per cent and huge operational losses It was then followed by the cash crunch due to demonetisation that forced them to slash the stakes money by 50 per cent for the first four racing days Now if a sin tax at the rate of 40 per cent as prescribed in the GST is applied it would be the straw that may break the camelrsquos or in this case the horsersquos backRebranding failMeanwhile if sin tax is imposed it would also be a slap in the face of the race club which for years now has marketed itself as a family centre or a weekend entertainment zone using terms like lifestyle sport for racing instead of gambling In fact the gword is anathema to racing officials who have been repackaging the racecourse much to the chagrin of the punter who is irked by what he says is ldquothe regular song lsquonrsquo dance in the paddock which obstructs the serious study of horsesrdquoWhat is GSTGoods and Services Tax is a comprehensive indirect tax on manufacture sale and consumption of goods and services throughout India to replace taxes levied by the central and state governments It would mean there is one tax rate for allAbout sin taxSin tax is a globally prevalent practice under which products like alcohol and tobacco attract higher rates of tax Typically lsquosin taxrsquo is an excise tax that is levied on products and services considered to be bad for health or society such as alcohol tobacco and gambling These additional taxes are also seen as efforts to discourage people from the use of such products or services