The GoM, in its first report, has recommended that in case of online gaming, the activities should be taxed at 28% on the full value of the consideration.
A ministerial panel on Tuesday referred issues raised by industry representatives on the proposed tax rate increase on online skill gaming from 18% to 28% and taxation issues related to casinos, to the GST Council’s Law Committee for consideration, sources told FE.
The group of ministers (GoM) has also been given time till August 10 to submit its report, extending the earlier deadline of July 15, the sources said. The GST Council will meet in the third week of August instead of the first week, keeping in view of the upcoming Parliament session (July 18 to August 12) and Independence Day.
“In the virtual meeting of the GoM today, the stakeholder industries gave presentations on taxing casino, race course and online gaming. Some references were also made with regard to court rulings on these issues. It was decided that the Law Committee of the council will examine these issues and submit a report before the next GoM meeting,” an official said.
In the council meeting at Chandigarh on June 29, the GoM convened by Meghalaya chief minister Conrad Sangma was directed to re-examine the taxation issues and submit its report by July 15.
The re-examination was necessitated by Goa’s plea for better understanding. Goa has flagged issues such as how tax will be calculated if the full amount of token purchased is not utilised in a casino and the balance returned at the counter or some portion is used for food and entertainment.
The GoM, in its first report, has recommended that in case of online gaming, the activities should be taxed at 28% on the full value of the consideration, by whatever name such consideration may be called including contest entry fee, paid by the player for participation in such games, without making a distinction such as games of skill or chance.
In case of race courses, it said GST should continue to be levied at the rate of 28% on the full value of bets pooled in the totalisator and placed with the bookmakers. In case of casinos, GST be applied at the rate of 28% on the full face value of the chips/ coins purchased from casino by a player. In case of casinos, once GST is levied on purchase of chips/ coins (on face value), no further GST should apply on the 28% value of bets placed in each round of betting, including those played with winnings of previous rounds, the GoM has said.
