The Finance Ministry has notified norms for registration by global online gaming platforms providing services in India to provide a level playing field. Another notification sets October 1 as the date for implementing a 28 per cent uniform duty on online money gaming and casinos.
On Friday, the Ministry issued notifications for implementing 28 per cent uniform GST on online money gaming, casinos and horse racing. All these have been done even though some States have yet to amend the SGST (State Goods & Services) law.
“A non-resident taxable person, a person required to deduct tax at source, a person required to collect tax at source and a person supplying online information and database access or retrieval services (OIDAR) from a place outside India to a non-taxable online recipient or a person supplying online money gaming from a place outside India to a person in India” will be required to apply for registration and declare PAN, a notification said.
Another notification treats the “supply of online money gaming as the goods on import” and empowers tax officials to levy IGST. The form for registration by overseas players has also been notified.
GST Council, in its meeting on July 11, recommended the implementation of a uniform 28 per cent on online money gaming, casinos and horse racing. It was said the tax would be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker/totalisator in the case of Horse Racing and on the full value of the bets placed in case of the Online Gaming.
Later, on August 2, the Council recommended amendments to the CGST and IGST Acts to clarify the taxation of supplies in casinos, horse racing and online gaming. It also recommended inserting a specific provision in the IGST Act to provide for liability to pay GST on a supplier located outside India supplying online money gaming to a person in India. At the same time recommendation was also made to prescribe GST on valuation online gaming supply and actionable claims in casinos at the entry level.
The Centre has already amended laws and is now notified of October 1 as the appointed date for implementation. Another notification placed online money games, casinos and horse racing along with betting, gambling and lottery in the list of specified actionable claims with effect from October 1.
The notification has also prescribed norms for valuation. According to the notification, the value of supply of online gaming, including supply of actionable claims involved in online money gaming, “shall be the total amount paid or payable to or deposited with the supplier by way of money or money’s worth, including virtual digital assets, by or on behalf of the player.” When a player does not utilise the entire money deposited or get the balance back, that portion will not be deducted from the value of taxable supply.
For casinos, the valuation of supply of actionable claim will include the total amount paid for the purchase of the tokens, chips, coins or tickets or for participating in any event, including game, scheme, competition or any other activity or process, in the said casino. Here, the amount returned for unutilised chips or casinos will not be deducted from the value for taxation.