Goods and Services Tax (GST): The group of ministers (GoM) on casinos, online gaming and horse racing, which has been tasked with examining the issue of levying a 28 per cent GST on these activities, met on Tuesday and the meeting remained inconclusive, a source told CNBC-TV18. The panel was given time till July 15 to examine the issue and submit its fresh report.
The GoM, headed by GST Council Meghalaya Chief Minister Conrad Sangma, discussed the valuation mechanism and expressed the opinion that GST should be levied on gross gaming revenue, as per international best practices, and not the overall pool as was recommended earlier, said the source.
The source also said GoM members were all on board on levying a 28 per cent GST on all three activities — online gaming, casinos and race courses. The group has not yet reached any decision on which component will be taxed.
The group of ministers might meet again before August 10 to finalise the recommendations and submit its report.
The GoM had earlier recommended that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by the player on participating in the game. In cases of race courses, the GoM recommended that GST be levied on the full value of bets pooled in the totalisators and placed with the bookmakers.
After the 47th GST Council meet at June-end, Union Finance Minister Nirmala Sitharaman said the Council was of the prima-facie view that the common thread connecting them is that these activities are in nature of “gambling” and should be taxed accordingly.
She added that the Goa chief minister was of the view that casino should be treated differently than the other activities — horse racing, online gaming and lottery. The finance minister also said the GoM has been given time till July 15 to study and submit a fresh report. The Council will meet in the first week of August exclusively to discuss the fresh report of GoM and a final decision will be taken.
The GoM had recommended that no distinction should be made on grounds of game of skill or game of chance for the purpose of the levy of GST. The panel added that the rate of GST on all such activities should be 28 per cent.
On the valuation, the GoM had earlier said that in the case of online gaming, it should be full value of consideration, including contest entry fee, paid by the player for participation. It added that in the case of race courses, it should be the full value of bets pooled in the totalisator and placed with bookmakers. It also said that for the valuation for casinos, it should be full face value of chips/ coins purchased from casino by a player.
The GoM also said once GST is levied on purchase of chips/coins (on face value), no further GST should apply to the value of bets placed in each round of betting including those played with winnings of previous rounds. Entry fee to casinos, including the price of one or more other supplies such as food, beverages, etc., will be at 28 per cent.
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