From 2% to 12%: GST slams down hard on sports goods

Sports goods will be taxed in the 12%-28% slab, which will burn several pockets. Sports enthusiasts used to pay 2% tax before. But now they will have to pay a minimum of 12%.

The government is all set to implement GST from midnight on July 1. From then, all goods and services around the country will have a defined slab. However, the slab assigned to sports goods have started to haunt the sports industry already.

Earlier, sports goods had to pay 2% tax. But according to the recent circular released by the government, sports goods are listed between 12%-28% slab - which will not be welcomed by entrepreneurs in the sports goods industry.

Entrepreneurs have been highlighting that the change is drastic, and will not only bother them but also customers. They feel that the sports industry should be in the 5% slab, instead of the current 12% minimum, thanks to the GST.

GST applies “Harmonized System of Nomenclature” (HSN), which is an international system used for classifying goods under international trade. According to HSN, sports goods - other than articles and equipment for general physical exercise - are in the number 9506.

“The 12% to 28% slab will majorly worry us. Before GST, people who used to pay Rs 2 as a tax for sports equipment which costs Rs 100. They will have to pay an extra Rs 26. So the total cost of equipment will increase from Rs 102 to Rs 128,” Ajay Hebbar, from Olympic Trophies and Sports located in Shantinagar, told Asianet Newsable.

He also opined that the rate discrepancies are unreasonable. The tax for sports goods like cricket and football have increased to 12%. Whereas, the tax charged gymnastics and athletics will be 28%.

Hebbar said sports like gymnastics and athletics are typically played by youngsters who come from poor backgrounds. Even school managements will think twice to buy goods for the games, he feels.