The Maharashtra Authority of Advance Ruling ( AAR ) has ruled that, receipt of prize money from horse race conducting entities, in the event horse owned by the applicant wins the race, would amount to ‘supply under section 7 of the Central Goods and Service Tax Act, 2017.
The horses owned by the applicant Shri Vijay B. Shirke participate in races organized at different clubs. The horse races take place at Royal Western India Turf Club (RWITC) located in Mumbai and Pune. The applicant also participates in horse races held in Mysore Club, Bangalore Turf Club, Hyderabad Race Club, Royal Calcutta Turf Club and Madras Race Club. Upon winning such horse races, the applicant is awarded prize money in respect of horses, which win the race.
The Authority was dealing the Question, Whether receipt of prize money from horse race conducting entities, in the event horse owned by the applicant wins the race, would amount to ‘supply under section 7 of the Central Goods and Service Tax Act, 2017 or not and consequently, liable to GST or not?
The AAR observed that, “under Chapter III of the CGST Act 2017 provides for levy and collection of tax. Section 9 is the charging section. This charging section provides for levy of taxes on all intra-state supplies of services at such rates, as notified by the Government and collected in such manner as may be prescribed in the notification schedules. Under the GST Act, the Exemption Notification No. 12/2017 CT (Rate) dt. 28.6.2017 is issued by the government, by which a specific supply of services is exempted from taxes. The services A t than those notified services would naturally be covered under “Taxable supply of es”. The taxable supply of services are notified and classified under Notification No. 17 CT (Rate) dt.28.6.2017 and rate of taxes are prescribed therein. We find that the applicant’s services are not covered under exemption notification No.12/2017 of CGST ACT and therefore, this transaction is not covered under the exemption category of services. Hence, we have perused the Notification No.11/2017, which covers the taxable supply of services and rate of tax thereon. We find that the applicant’s activity and services rendered are not specifically described in the said notification 11/2017 and hence, it is covered by the entry at Sr. no. 35 i.e. “Other services and other miscellaneous services including services nowhere else classified” and are held taxable services @ 18 % (9% each of CGST and SGST). According to us, as discussed above, applicant’s transaction is a supply of services, under entry at Sr. no. 35 of notification no. 11/2017 i.e. “taxable services” and liable to tax @ 18% under GST Act”.Subscribe Taxscan Premium to view the Judgment