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“The Karnataka government had asked for some clarifications on entertainment tax. After giving them and endorsements from sports ministry and athletics federation, we have been successful in solving the issue,” said the Procam Joint Managing Director Vivek Singh.
Procam is promoter of the branded 10K run. In 2016, the Karnataka Commercial Taxes Department had sought clarifications for claiming entertainment tax from Procam International for the run.
The tax authorities had said the participation fee collected was taxable because the event was entertainment in nature.
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Moreover, an entry fee is collected to provide medical facilities, energy stations, refreshments, recovery zones and sanitary facilities, for participants, he said.
Singh also said the Karnataka High Court, in 2016, had declined to intervene in the case and asked Procam to pursue the matter with tax authorities.
A petition was filed by Procam challenging the tax claim by arguing that the run was not a spectacular sport, but participative, he added.
However, Procam will pay 18 per cent GST on entry fee collected from each participant, he said.
The run, which was first held in 2008, has grown in stature and popularity with the number of participants increasing each year.
Replying to a query, Singh hoped that the event would raise Rs 10 crore for charity in the edition on May 13 this year.
“The charity partner is quite hopeful of raising Rs 10 crore this 11th edition. Last year, the event raised a record over Rs 7 crore,” he said.