The GST Council, on Wednesday, asked the Group of Ministers on online gaming, casinos and horse-racing, to re-deliberate the tax issue and get back by July 15. The report of the GoM will be taken up in next meeting of the council, which is likely to take place during first week of August at Madurai.
“Goa wanted different treatment for casinos. Therefore, it was decided that Conard Sangma, Chair of GoM, will once more hear Goa and even as this issue is taken, some of the members of the GoM felt if there is window to casino to be heard again, let horse racing to be heard again, let online games to be heard again. We have allowed that, but with the condition that report should be back again with us by July 15,” said the Finance Minister Nirmala Sitharaman in a press conference after conclusion of the two-day GST Council here on Wednesday.
The GoM, headed by Meghalaya Chief Minister Conard Sangma, recommended a uniform 28 per cent GST rate on horse racing, online gaming and casinos. The panel also recommended the base on which this rate should apply. As on date, online gaming has a dual rate of taxation — 18 per cent on games of skill (not involving betting or gambling) and 28 per cent on games of chance (involving betting and gambling). Most online gaming apps pay GST at the rate of 18 per cent. Both casinos and horse racing attract GST of 28 per cent. However, the issue here is more about the value for calculation of GST.
Sitharaman said: “The one thing which I would like to highlight to you first that whether it is horse racing or online gaming or casino, the common thread which the committee highlighted was that they all are part of betting and gaming. In other words, they are essentially gambling. There may be element of skill or element of chance in it, but essentially all of three are gambling and even by existing rules, they are treated so and treated uniformly and all of them are taxed at 28 per cent.”
Further, she said that GoM looked at each one of them, heard various stakeholders and took a call that based on two judgement of Supreme Court in the matter of Lotto and Sunrise Industries. In the matter of latter, the apex court said that actionable claim is the point at which tax will have to be levied. Both the rulings confirmed existing law which treat variety of gaming similarly and incidence of tax levied is broadly accept. GoM after discussing all these went by the facts and concluded that is the only rationale way of handling it is status quo.
MS Mani, Partner and Leader (Indirect Tax), Deloitte India says: “The decision to have more consultations in respect of the betting, casino and related sectors is very welcome as the views of industry stakeholders in employment-intensive businesses would add value to the decision-making process.”
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