GST will make visit to sports stadiums expensive, IPL to be severely hit

The induction of GST from July 1 will make tickets to sporting events very expensive. A visit to an IPL game next year could cost you a few extra bucks as 28% tax will be levied on the tickets, which is the highest tax slab. Other events, which are organised by recognised sports bodies like the BCCI, will attract a tax of 18%.

Since the IPL is a combination of entertainment and huge prize money, it will be slightly more expensive to watch. Tickets below Rs 250 are exempted from GST but tickets in that price category are very few. The Test matches, ODIs and national T20s were to be levied with 28% tax as well but a meeting on Thursday concluded that since they are recognised sporting meets, they will be charged 18% instead of 28. Such heavy taxes will restrict spectators to go watch the game, especially Test cricket.

‘Cricket must be kept away from GST’

Vinay Mruthyunjaya, a chartered accountant by profession and also a Managing Committee Member of the Karnataka State Cricket Association, opinionates that sporting events should be kept away from GST as it is promoting a sport.

“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 organised on a commercial basis. Until now, admission to recognised sporting events was fully exempt from such levies. Exemption for recognised sports events has been the practice as they are conducted by recognised bodies like BCCI. They are involved in the promotion of sports and the playing teams represent their countries. For instance, Karnataka 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,” said Vinay.

‘Distinguishing IPL and recognised sports futile’

Vinay has also suggested the BCCI that all cricket games must be exempted from GST but is yet to hear back from them. He also rubbished the differentiation in IPL and India matches as they both are essentially sporting events.

“An attempt is made to distinguish `recognised 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 the country, state, zone or district and organised by recognised sports bodies federations will now attract GST. If there was no intention to give an exemption for recognised 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.

Sponorships to be levied 18% tax

From the existing 15%, sponsorships will attract 18% tax from July 1 onwards. National Sports Federations, Association of Indian Universities, School Games Federation of India and other sporting bodies pertaining to National Games are exempted from sponsorship tax. There is still a big cloud over GST in cricket. If no measures to curb this tax are taken, the queues outside stadiums are set to be shorter.