GST on online gaming, casinos? This is what is proposed

According to a report by the PTI news agency, a panel of finance ministers will submit their report on taxation of casinos and online gaming to FM Nirmala Sitharaman in a day or two.

At present, the current VAT rate in this sector of the online gaming industry is 18% on the gross gaming revenue (GGR) and 0% on the competition entry fee (CEF).

The GST Council is considering raising the tax on online gambling to 28%.

The GST council is likely to meet at the end of this month or next month. The GoM, led by Meghalaya Chief Minister Conrad Sangma, had proposed in an earlier report to the GST Council to levy 28% GST on gross sales value, as horse racing, online gaming and casinos are akin to gambling or gambling.

However, as Goa wanted further discussions regarding casinos, the GST council, made up of the Union’s finance minister and her state colleagues, suggested that the GoM hold further discussions and submit a final report by July 15.

Now the group of ministers will submit their reports to the finance minister in a day or two. Ministers also met with industry stakeholders late last month to hear their concerns.

In the report submitted to the Council last month, the Group of Ministers recommended taxing online gambling at the full value of the consideration, including the entry fee a player pays to participate in the game.

As for casinos, the government had recommended that the tax be levied on the full face value of chips/coins purchased by a player from a casino.

The GoM added that there will be no GST on the value of bets placed in any betting round, including those with winnings in previous rounds.

The finance ministers in the eight-member GoM include Suresh Khanna (Uttar Pradesh), Kanubhai Patel (Gujarat), P Thiaga Rajan (Tamil Nadu) and T Harish Rao (Telangana).

Meanwhile, the industry association has told the Internet and Mobile Association of India (IAMAI) that the highest tax rate of 28% is for things considered “sinful consumption”, equating games of skill with gambling, betting and betting against the spirit of the Supreme Court ruling.

The IAMAI has called on the government to maintain the status quo for the online skill games industry at 18%, as imposing a 28% tax on gross gambling revenues will increase the tax burden up to 55%.

(with PTI inputs)

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