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Parminder Gill

Parminder Gill is the Co-Founder and Head of Business at EduSports, India's largest sports education organization. A business leader with background in sales, marketing and entrepreneurship in IT and Education space, Parminder has run leadership roles in large, medium and start-up firms in India and the US. After a successful global career, Parminder helped start and scale EduSports, a pioneering sports education organization enabling over 650 schools all over the country to improve learning and helping over 500,000 children become healthier and fitter.

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Hike in GST Taking a Toll on the Sports Education Sector

If you want to “create an ecosystem to nurture the talent”, you need to proceed accordingly. Professional sports training at an early stage is the only way to ensure nurturing of sporting talent. By heavily taxing sports training start-ups, India might be losing its only chance to international sporting glory.

On the 15th of June 2017, Prime Minister Narendra Modi, while inaugurating the Usha School of Athletics in Kinalur (Kerala), in his speech said "India has huge potential in sports. It is a sports loving country. We have no shortage of talent. But we need to provide the right kind of opportunity and create an ecosystem to nurture the talent. A strong sporting culture can help the growth of a sporting economy. The sports industry sector provides chances in different segments such as; sports science, medicine, support personnel, skill development, and sports management among others”.

Ideally, sports must find itself in safe hands in a country whose leader has such rich farsightedness about the sector. However, for athletes to win at a global level, professional sports training at all domestic divisions is paramount. While professional sports training for advanced learners has existed for many years in our country, a complete systemic overhaul of sports in India requires organized sports training to trickle down to the grassroots or what we call the school level. Child prodigies turn into champions only when they are guided at an early stage.

In the start-up decade of 2010, many sports education enterprises, after having identified this need gap, started building professional setups in-sync with schools to reach and groom talent at the junior-most school level. But just when they thought they had acquired critical mass, a policy change halted their momentum.

On the 1st of July 2017, the Goods and Services Tax was implemented in India. The sports education sector, which previously attracted no service tax liability, suddenly found itself in one of the highest GST tax brackets out there. An 18% GST has taken a toll on the very foundations on which this sector was rapidly building its base.

With an added 18%, schools are unwilling to come on board with the very idea of sports education.

As per GST regulations, as there is no GST being charged onto the pupil, the schools won't get GST input credits either; nor do they have an option of charging higher fees to recover the taxes paid

As with the fee regulation measures taken by different states to cap the fee structure of the private schools, it has already limited the ‘discretionary resources’ available to schools to experiment with new tools and ideas, specifically meant for improving the overall learning outcomes of children.

Introduction of GST now has virtually sounded the death knell for any investments or improvements – specifically in areas such as sports education in schools. It has applied brakes on all the cross-flow of ideas between the schools and the larger ecosystem.

This could lead to fewer children playing and participating in sports as schools are stepping back from providing improved sports infrastructure facilities

Technically, singing, dancing, art and sports, all of them fall in the extra-curricular category. But apart from sports, all the other vocations have been exempted from GST while a mammoth 18% rate is all set to marginalize the already subservient sporting culture in India. Pursuing sports as a career will surely become expensive. The government has also decided to put the goods manufacturing industry into the 12%-28% tax slab, thus increasing the prices of sports equipment and making it difficult for quality equipment being made available to youngsters at the grassroots level.

Moreover, in an era where childhood obesity and other health problems are on the rise amongst school-going kids, imposing heavy duty tax on sports training will further aggravate this issue. Sports is the most fun way of maintaining a healthy body, especially for kids. Taxation will only create an unfit nation.

To sum it up, this new rule change poses some critical questions on the government’s exact intentions. How do you expect a sporting culture to permeate in every nook and corner of the nation when the very catalysts of change in sports education are being discouraged by regulations? Monetary repercussions are a major incentive for any sector to alter discourse in this country. Will such harsh fiscal modifications not discourage an entire generation of entrepreneurs who plan to take professional sports education to every school in India?

If you want to “create an ecosystem to nurture the talent”, you need to proceed accordingly. Professional sports training at an early stage is the only way to ensure nurturing of sporting talent. By heavily taxing sports training start-ups, India might be losing its only chance to international sporting glory.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


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