GST rollout impact: After the Goods and Services Tax (GST) was implemented on July 1, the calculations to manage expenses have increased. The new tax regime brings all the goods and services under four different tax slabs. While this move makes a lot of items cheaper, it isn’t the case when it comes to the sports industry.
Not just the prices for sporting equipment and accessories in use are set to go up but the prices of tickets for matches is also likely to increase. Tax rates for some of the outdoor sports and athletics equipment will go up significantly from the current rates.Earlier, the manufacturers were paying 2% excise duty on goods which was introduced in 2011. However, after the implementation of GST, these goods will be taxed in 12 to 18 per cent tax slab which will lead to a significant rise in prices.
The decision was taken despite sporting manufacturers demand of keeping the equipment under the 5 per cent slab but the GST council decided to go ahead with the higher rate by saying that it is a cottage industry.“To make high-quality equipment, we need support from the government. The current move might have a negative impact on the growth of the industry. There are more than 1000 registered units and another 1500 cottage units in villages,” said Rakesh Mahajan, chairman of All India Sports Goods Manufacturers’ Federation to Hindustan Times.
Unfortunately, the GST council doesn’t recognise a number of sports gears like helmets, boxing headgear, sports kit bags, training bags, etc. as part of sports goods. As a result, all these items have been placed in the 12% tax rate category. Sports like rowing, canoeing, athletics, gymnastics and table tennis will be badly affected too as all of them will be taxed at 28 per cent.Apart from this, ticket prices for sporting leagues such as Indian Premier League (IPL), Pro Kabaddi League (PKL) etc, will also go up as they will be taxed at 28% under the new GST regime. However, the tickets for matches organises by national sports federations which would have India in a competition will stay under the 18 percent tax bracket.
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