Union Finance Minister Nirmala Sitharaman chairs the 47th meeting of the GST Council in Chandigarh on Wednesday, June 29, 2022. A two-day meeting of the panel considered a report of the group of ministers but deferred a decision as Goa and some others wanted to make more submissions.

The GST Council on Wednesday deferred decision on levying a 28% tax on casinos, online gaming, horse racing and lottery which is 18% at present.

A group of ministers headed by Meghalaya Chief Minister Conrad Sangma has been asked to consider submissions of stakeholders again on the valuation mechanism and submit its report by July 15 by Finance Minister.

The council will meet again in the first week of August to decide on the issue as directed Ms. Sitharaman.

The group of ministers had recommended that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by the player on participating in the game.

In cases of race courses, it had suggested that GST be levied on the full value of bets pooled in the totalisators and placed with the bookmakers.

It also recommended that no distinction should be made on grounds of game of skill or game of chance for the purpose of the levy of GST and should be taxed at the highest rate of 28 per cent.

However, on the other side, Online skill-based gaming industry has made a case for retaining the service under the 18% GST slab instead of putting it into the highest 28% tax rate category, saying the move will badly hit the $2.2-billion sector.

The increase in taxation would not only have a catastrophic impact on the industry but also encourage offshore operators who would circumvent Indian tax jurisdiction by hosting games in some other country, as stated by Games24x7’s co-chief executive officer Trivikraman Thampy. He further added, It would be a triple whammy:

  • the industry loses out,
  • the government loses out on tax revenue and
  • players loses out as they would be exposed to unscrupulous operators.

An association of online skill-based gaming platforms has made representation before the authorities for retaining Goods and Services Tax (GST) at the current level for the industry which has 400 players employing about 45,000 people.

GST is currently charged on platform  fee, termed as Gross Gaming Revenue (GGR), rather than on the entire amount pooled in for a game.

Let us see what GST Council will decide in its upcoming meeting, agenda of which yet to be decided.

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