The ruling caused uproar among fanciers because it means their clubs will not be exempt from VAT, adding additional cost to a pastime enjoyed largely by elderly and low-income aficionados.
Last year, Customs agreed that golf clubs qualified and as a result many received considerable VAT rebates plus interest dating back to January 1990.
Pigeon fanciers felt their hobby deserved similar recognition but the Commissioners for Customs and Excise refused, saying it was the pigeons, not the fanciers, that did all the work.
The Royal Pigeon Racing Association, whose patron is the Queen, took the case to appeal where its general manager, Major Edward Camilleri, argued that pigeon racing was physical enough to be classed as a sport.
He said preparation for a race involved feeding, cleaning, driving and lifting of transport crates weighing up to 40 pounds. At the end of each race when the pigeon enters the loft a ring must be removed from the bird's leg and placed in a clock, recording the finishing time.
But the Sports Council said it did not recognise pigeon racing as a sport, defining sport sport as something that should "encourage people in acquiring physical skills and undertaking physical effort".
The tribunal ruled that "because the pigeon undertakes the physical activity concerned, the activities of the owner are purely incidental."
The Royal Pigeon Racing Association's council, which represents 54,000 members, said it is considering challenging the ruling in Europe. A spokesman said: "Obviously we are disappointed at the ruling, particularly when you consider some of the activities that are classed as `sports'."Reuse content