Express News Service
NEW DELHI: The Group of Ministers (GoM) formed to decide taxation for casinos, race courses and online gaming has submitted its second report to Finance Minister Nirmala Sitharaman, the panel’s head Meghalaya Chief Minister Conrad Sangma tweeted on Thursday.
The GoM, in its previous meeting in November had agreed on a 28% GST on online gaming, casinos and horse racing. However, sources privy to the matter told this newspaper that the latest report has been submitted without any consensus on the way tax should be levied on these transactions. The matter is likely to be taken up at the GST Council meet on Saturday, they added.
There is a lot of confusion whether GST should be levied on the full face value or gross gaming revenue. The GST Council is expected to take a call on this on Saturday. There are differences of view on the GST rate as well. Currently, 18% GST is levied on online gaming. The tax is levied on gross revenue, which includes fees charged by gaming portals.
Goa, whose transport and industries minister Mauvin Godinho is also a part of the GoM, has been batting for 18% GST. So do industry players, as they believe online gaming is a ‘game of skill’ unlike casinos and horse racing, which are ‘games of chance’.
The GoM was supposed to finalise the revised report by August 10, but submission was postponed due to lack of clarity on the taxation process. According to experts, higher taxation or incorrect levy could lead to revenue loss for the government as users are likely to shift from legitimate online gaming platforms to offshore betting and gambling platforms. In its recent report on ‘international best practices in GST for online gaming’, law firm Lakhsmikumaran & Sridharan notes that most leading economies including the UK, Australia and Singapore follow the “tax on gross gaming revenue” model.
NEW DELHI: The Group of Ministers (GoM) formed to decide taxation for casinos, race courses and online gaming has submitted its second report to Finance Minister Nirmala Sitharaman, the panel’s head Meghalaya Chief Minister Conrad Sangma tweeted on Thursday.
The GoM, in its previous meeting in November had agreed on a 28% GST on online gaming, casinos and horse racing. However, sources privy to the matter told this newspaper that the latest report has been submitted without any consensus on the way tax should be levied on these transactions. The matter is likely to be taken up at the GST Council meet on Saturday, they added.
There is a lot of confusion whether GST should be levied on the full face value or gross gaming revenue. The GST Council is expected to take a call on this on Saturday. There are differences of view on the GST rate as well. Currently, 18% GST is levied on online gaming. The tax is levied on gross revenue, which includes fees charged by gaming portals.
Goa, whose transport and industries minister Mauvin Godinho is also a part of the GoM, has been batting for 18% GST. So do industry players, as they believe online gaming is a ‘game of skill’ unlike casinos and horse racing, which are ‘games of chance’.
The GoM was supposed to finalise the revised report by August 10, but submission was postponed due to lack of clarity on the taxation process. According to experts, higher taxation or incorrect levy could lead to revenue loss for the government as users are likely to shift from legitimate online gaming platforms to offshore betting and gambling platforms. In its recent report on ‘international best practices in GST for online gaming’, law firm Lakhsmikumaran & Sridharan notes that most leading economies including the UK, Australia and Singapore follow the “tax on gross gaming revenue” model.
