Online gaming

GST on online games, casinos? Here’s what’s on offer

A group of state finance ministers are expected to submit their report on casino and online gambling taxation to FM Nirmala Sitharaman within a day or two, according to a report by news agency PTI.

Currently, the current rate of GST on this sector of the online skill gaming industry is 18% on gross gaming revenue (GGR) and 0% on game registration fees. competition (CEF).

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

The GST Council is expected to meet towards the end of this month or next month. The GoM under the Chief Minister of Meghalaya, Conrad Sangma, had in an earlier report proposed to the GST Board to levy 28% GST on the gross value of sales as horse racing, online gambling and casinos are akin to betting or gambling.

However, since Goa wanted further discussions regarding casinos, the GST Board, comprising the Union Finance Minister and his state counterparts, suggested that GoM hold further discussions and submit a final report by July 15.

From now on, the group of ministers will submit their reports to the Minister of Finance 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 that online gambling be taxed at the full value of the consideration, including the competition entry fee paid by a player for participating in the game.

With regard to casinos, the GoM had recommended that the tax be levied on the total face value of chips/coins purchased from a casino by a player.

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

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

Meanwhile, industry body Internet and Mobile Association of India (IAMAI) said the highest GST rate of 28% is for things considered “sinful consumption”, and equating games of skill with gambling, betting and betting will be against the spirit of the Supreme Court judgment.

IAMAI has called on the government to maintain the status quo on the online skill gaming industry at 18%, as the imposition of a 28% tax on gross gaming revenue will lead to an increase in tax incidence at 55%.

(With PTI inputs)

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