With the implementation of Goods and Services Tax (GST) from July 1, an initiative to bring one tax percentage across the country to specific categories/products, the impact will be felt to sports too. The prices for sporting equipment and accessories in use will go up with the taxing structure undergoing an overhaul. Tax rates for some of the outdoor sports and athletics equipment will go up significantly from the current rates.
Sports manufacturers had previously been paying 2% excise duty on goods after the charge was brought to the fore in 2011. Under GST, these goods will be taxed in the 12-28 per cent slab which will take the pricing up significantly. The sporting manufacturers had asked for the GST rate on sporting equipment to be kept under the 5 per cent slab, arguing that it is a cottage industry, the GST Council has decided to go ahead with a much higher rate.
The council doesn’t recognise a number of essential items like sports helmets, boxing headgear, sports kit bags, training bags, etc. as part of sports goods. Therefore, these items have been placed under the 12-28 per cent slabs. Sports gloves will also get dearer with their tax rate kept at 12 per cent. Some of the sports which will be deeply affected are rowing, canoening, athletics, gymnastics and table tennis, all of which will be taxed at 28 per cent.
“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.
Tickets for leagues to get expensive
The ticket prices for sporting leagues such as Indian Premier League (IPL), Pro Kabaddi League (PKL) and the likes will go up as they will be taxable at 28 per cent under the GST regime.
However, tickets only for the club culture – leagues in this case – have been put under the 28 per cent bracket. Other matches organised by the national sports federations which would have India in a competition will stay under the 18 percent tax bracket.
One exemption in the club ticketing is if the tickets cost less than Rs 250 – however, finding tickets this cheap is a rarity and only a few tickets go for this low.