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TMI Blog2019 (10) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate race authorities, for participating in horse races - We find this activity, as an activity covered by clause (a) of the definition of business under Section 2(17) of CGST Act, 2017 - The applicant never passes the ownership of horses to the race organizer. Therefore, participation of horses for the purpose of events organized by the clubs is a supply of services to the event organizer. All the ingredients of supply of services are satisfied in the activity undertaken by the applicant in respect of providing horse to the race club/ event organiser and receiving consideration thereof on winning of race. Therefore, this transaction is clearly covered under supply of services under section 7 of CGST Act. The applicant s services are not covered under exemption notification No. 12/2017 of CGST ACT and therefore, this transaction is not covered under exemption category of services. Hence, the N/N. 11/2017, which covers taxable supply of services and rate of tax thereon. 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 miscellane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yderabad Race Club, Royal Calcutta Turf Club and Madras Race Club. Upon winning such horse races, the applicant is awarded with prize money in respect of horses, which win the race. 3. In the year 2012, when the Service Tax was introduced, Royal Western Turf Club Ltd. (RWITC) Mumbai issued a letter bearing No. PA/4860 dated 28/07/2012 to Western India Race Horse Owners Association Ltd., in which RWITC informed to the horse owners that the amount of stake / prize money received by the owners is covered under Service Tax. Accordingly, the applicant paid the service tax at the applicable rate till June, 2017. As the definition of service under the Service Tax Act is identical in the GST, the applicant continued to pay the GST under the GST Act. 4. During the period from 01.07.2017 to 28/02/2019, the applicant has been a winner in several horse races and has been awarded with prize money, totally, amounting to ₹ 3,03,41,881/- 5. On receipt of the above amount (prize money won in race competitions), the applicant has paid GST with effect from 01.07.2017 under bonafide belief that the above transaction qualifies as a supply of service, under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged 2.5 On perusal of the above provisions, it can be well understood that an activity/transaction can be classified as supply only if it is made: (i) by one person to another; (ii) for a consideration and (iii) in the course of or furtherance of business. 2.6 In the instant case, according to the applicant, all the ingredients are satisfied. The applicant is the service provider. The race club/organizer is the recipient. The applicant owns the horse. The horse takes part at the race organized by the club/organizer. The horse participates in the said race. If the horse wins, a consideration is paid to the applicant for participating and winning the race. 2.7 In the present case, the applicant s horses participated in different competitions organized by race clubs/organizers, and the owner received prize money in respect of the horses which won the race/s as per the Rules laid down by the respective race club by making payment of entry fee before the date of race ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) Shri Vijay B. Shirke ( applicant ) is duly registered person under the GST Act. He owns horses and these horses participate in races organized at different clubs. The horse races take place at various locations i.e. at Mumbai, Pune, Bangalore, Hyderabad, Calcutta, and Chennai. Upon winning such horse races, the applicant is awarded with prize money in respect of horses which win the race. 2) We find that as per applicant s submission that the amount of stake / prize, money received by the horse owners was covered under Service Tax Act w.e.f. 2012. Accordingly, the applicant paid the service tax at the applicable rate till June, 2017 and as the definition of services under the Service Tax Act is identical in the GST, the applicant continued to pay the GST on receipt of the amount of prize money won in race competitions, under the GST Act, with effect from 01.07.2017, under bona fide belief that the above transaction qualifies as a supply of services under the provisions of the GST Act, 2017. For discharge of GST on the above transaction / supply, the applicant has utilized input tax credit. Now, the applicant being little bit in confusion that the above transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s - (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business, (b) import of services for a consideration whether or not in the course or furtherance of business, and (c) the activities specified in Schedule I, made or agreed to be made without a consideration. (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section they shall be treated either as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1), (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, profession or vocation; (h) services provided by a race club by way of totalisator or a licence to book maker in such club, and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, From the above definition, the term business broadly means any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity whether or not it is for pecuniary benefits. Any activity ancillary or incidental to these activities are also covered as business. It has also been provided that any activity or transaction falling in above categories would be business whether or not there is volume, frequency, continuity or regularity in transactions. Now, we look into the nature of activity undertaken by the applicant. Whether, it can be treated as business or not. The activity undertaken by the applicant is already detailed into earlier paras. The applicant is undertaking the activity of rearing, training, maintaining and providing the horses, that are specialized one and according to the requirement of appropriate race authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion notification No. 12/2017 of CGST ACT and therefore, this transaction is not covered under exemption category of services. Hence, we have perused the Notification No. 11/2017, which covers 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. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-12/2019-20/B-106 Mumbai, 04.10.2019 For reasons as discussed in the body of the order, the questions are answered thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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