Fans hoping to attend next season’s Indian Premier League (IPL) are likely to see entrance fees soar after the government introduced a 28 per cent tax on some sports tickets under the controversial new goods and services tax (GST) regime.
The high rate was to be applied to all sports events until exemptions were agreed just hours before the tax was introduced on July 1.
While entertainment-based sports club events such as the IPL will be covered by the top rate, most other tickets will see an 18 per cent tax applied. Sporting events that fall into the latter category include international cricket matches, as well as games organised by other recognised sports bodies.
GST is a value added tax levy on the manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian central and state governments.
Tickets priced below $3.90 (£3.00/€3.40) are exempt from GST, although only a limited number of seats are to be reserved in this price band.
IPL level playing field
Vinay Mruthyunjaya, a chartered accountant, told the Times of India newspaper: “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.”
GST of 28 per cent on IPL will level the playing field across India, with large disparities in the entertainment tax rates charged in the country’s different states. Some states like Maharashtra (45%) levied hefty entertainment tax, while other states had none.
In Karnataka’s case, the service tax (15%) and entertainment tax (10%) components came to around 25 per cent, which means the new GST application enforces an increase of just three per cent.
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