The Goods and Services Tax (GST) Council may meet again next week to address technical issues regarding repetitive taxation in determining the face value for online gaming and casinos before clearing the draft amendment in the goods and services tax law in the upcoming monsoon session.
The discussion will focus on the “technical issues” related to the implementation of the GST council decision. There will be no reconsideration or further discussion on the council’s decision to impose a 28% tax rate on horse racing, casinos, and online gaming companies based on the full face value, regardless of whether it is a game of skill or chance, as informed by ET.
While the meeting date is set for August 2 via video conferencing, the official mentioned that it might be subject to change considering the ongoing monsoon session timing.
“One clarity is required regarding the determination of the full face value if players use their winning money to play another game,” a senior official told ET. “While this is a common practice, there are concerns about whether it will lead to repetitive taxation. Therefore, the law needs to be clear and unambiguous regarding that,” the official added.
In addition to this, the council will discuss two more technical points related to casinos. On July 19, ET reported on the gaming industry’s concern about potential repetitive taxation, which could be detrimental to the industry as they await detailed notification from the government. “We believe that levying GST on the face value at each game will severely impact user engagement with the platform,” said Roland Landers, CEO of All India Gaming Federation, which represents companies such as Mobile Premier League, Zupee, and Gameskraft.
The official added that the draft amendment is almost ready, and the fitment and the law committee are working on the fine print with specific details about the rate and methodology for determining the face value.
In an interview with the Economic Times earlier this month, Revenue Secretary Sanjay Malhotra mentioned that apart from taxation, there were also moral issues involved in the GST council’s decision to impose a 28% GST on online gaming involving monetary consideration. He added that games where no monetary consideration is involved still attract an 18% GST.
He said that the gaming industry is currently paying a tax of only 2-3% of the estimated turnover, and the government had collected Rs 1,700 crore from online gaming in FY 23, which could increase by at least 10 times.
FINAL VERDICT
-GST Council to meet next week via video conferencing
-To discuss repetitive taxation and technical issues
-No change in the Council’s decision of 28% GST on full face value
-Draft amendment almost ready, barring some technical points
-Centre intends to present the amendment in the ongoing monsoon session
The discussion will focus on the “technical issues” related to the implementation of the GST council decision. There will be no reconsideration or further discussion on the council’s decision to impose a 28% tax rate on horse racing, casinos, and online gaming companies based on the full face value, regardless of whether it is a game of skill or chance, as informed by ET.
While the meeting date is set for August 2 via video conferencing, the official mentioned that it might be subject to change considering the ongoing monsoon session timing.
“One clarity is required regarding the determination of the full face value if players use their winning money to play another game,” a senior official told ET. “While this is a common practice, there are concerns about whether it will lead to repetitive taxation. Therefore, the law needs to be clear and unambiguous regarding that,” the official added.
In addition to this, the council will discuss two more technical points related to casinos. On July 19, ET reported on the gaming industry’s concern about potential repetitive taxation, which could be detrimental to the industry as they await detailed notification from the government. “We believe that levying GST on the face value at each game will severely impact user engagement with the platform,” said Roland Landers, CEO of All India Gaming Federation, which represents companies such as Mobile Premier League, Zupee, and Gameskraft.
The official added that the draft amendment is almost ready, and the fitment and the law committee are working on the fine print with specific details about the rate and methodology for determining the face value.
In an interview with the Economic Times earlier this month, Revenue Secretary Sanjay Malhotra mentioned that apart from taxation, there were also moral issues involved in the GST council’s decision to impose a 28% GST on online gaming involving monetary consideration. He added that games where no monetary consideration is involved still attract an 18% GST.
He said that the gaming industry is currently paying a tax of only 2-3% of the estimated turnover, and the government had collected Rs 1,700 crore from online gaming in FY 23, which could increase by at least 10 times.
FINAL VERDICT
-GST Council to meet next week via video conferencing
-To discuss repetitive taxation and technical issues
-No change in the Council’s decision of 28% GST on full face value
-Draft amendment almost ready, barring some technical points
-Centre intends to present the amendment in the ongoing monsoon session
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