HYDERABAD: A ‘sting operation’, planned and executed by the Minister for Commercial Taxes, Talasani Srinivas Yadav, has exposed the fact that punters at the Hyderabad Race Club avoid paying tax, thereby denying the state exchequer of hundreds of crores of rupees.
Based on the revelations of the sting operation, the State government has decided to come out with an Ordinance, making amendments to the Andhra Pradesh (Telangana area) Horse Racing and Betting Tax Regulation Act (HRBT Act). The ordinance is aimed at collecting 100 per cent betting tax from the punters at the Hyderabad Race Course. In October this year, the minister gave some money to 60 officials of his department and instructed them to spend the money at Hyderabad Race Club, Malakpet.
Accordingly, the officials, masquerading as punters, walked into the race course, purchased coins and indulged in betting. Some lucky officials won, but that was not the reason why they were there. The officials were startled to find punters evading more than 95 per cent of betting tax due to the government. They returned and briefed the minister about how punters were evading betting tax. Based on the revelations, the minister decided to amend the existing act by bringing an ordinance, sources said.
Thereafter, the commercial tax officials raided the premises of six bookies at the Hyderabad Race Club and seized Rs 51 lakh. The Race Club responded by terminating their membership. As the Legislative Assembly was not in session, the minister took up the matter with CM K Chandrasekhar Rao and the government decided to bring out an ordinance. “The Ordinance will be sent to the law department, then it will be placed before the Cabinet,” sources within the Commercial Taxes department told Express.
Rs 4,000 crore Annual turnover
The annual turnover of Hyderabad Race Club is around Rs 4,000 crore and 95 per cent punters are avoiding tax. Now, with the new ordinance, the government is looking at additional revenue, running to a few hundred crores. The Race Club maintains the operations of the Race Course.
Ordinance to Rein IN the Punters
When a punter puts Rs 1 lakh and earns Rs 10 lakh, he has to pay a betting tax of 14.5 pc, i.e., Rs 1.45 lakh to the government. “We are getting only 5 pc of the tax now. Some are paying taxes nominally to show it in the IT returns. Some transactions are carried on white paper too,” sources said.