New Delhi: Teams participating in the Indian Premier League have requested the finance ministry to categorize the league’s cricket games as sporting activities rather than entertainment. This change would lower the goods and services tax on match tickets from 40% to 18%, aligning it with rates for international cricket events managed by India’s cricket governing body.
A government representative confirmed the request, noting that the GST Council will make the final decision.
Prior to the GST adjustments in September of last year, tickets for these league matches were taxed at 28%, while approved sports competitions faced an 18% rate. The recent overhaul introduced a 40% rate for items considered de-merit goods, including tobacco products, gambling, lotteries, and luxury vehicles. Tickets for the league now fall under this higher bracket.
The teams argue that the 40% rate is intended to discourage harmful activities with negative societal effects, such as betting and casino operations. They describe the league as wholesome family-oriented recreation that appeals to diverse audiences, asserting that equating it with gambling lacks justification and contradicts taxation principles.
They point out that even upscale services aimed at affluent consumers, like high-end hotel stays or premium air travel, are taxed at the standard 18% rate. Similarly, entry to various recreational and cultural activities, including amusement parks, performances, and exhibitions, attracts the same 18% levy.
Experts warn that imposing a 40% tax on access to such sports competitions harms the broader sports sector, which supports economic expansion and athletic advancement. A partner at a consulting firm highlighted how the league fosters talent from underprivileged communities, boosts sectors like hospitality and tourism, and enhances India’s prominence in global cricket.
Another expert noted that while other nations lead in sports like soccer or basketball, India holds a strong position in cricket. Applying the top tax rate could hinder this advantage, especially as emerging markets explore opportunities in the sport. Professionals recommend correcting such taxation anomalies that exceed the 18% norm.
