Economy

GoM Seeks Legal Opinion on Differently Taxing Online Games of Skill

The group of ministers (GoM) formed to decide the levy of Goods and Services Tax (GST) on online gaming, casinos, and horse racing is planning to separate the online games of skill from games of chance. However, a few GoM members pointed out that differential GST rates may result in fresh litigation amid no standard definition for games of skill.

Hence, the committee headed by Meghalaya Chief Minister Mr Conrad Sangma met recently and approached the law committee on the legal aspect of such differential treatment. The move of seeking legal opinion after online gaming companies submitted several court orders that distinguish games of skill from games of chance.

Earlier, the GoM recommended a levy of 28% GST on gross gaming revenue for online gaming, and the Council expected the final report by 10th August 2022. However, it sought more time to submit its final recommendations.

Sources say that the issue is not on the levy. It is on the legality of merging both games of skill and games of chance as betting. Therefore, it is mandatory for GoM to take a legal opinion before the final submission and to avoid any future legal dispute.

Last month, the gaming industry representatives met finance ministry officials and explained why the government should tax games of skill differently. Also, the industry argued that online games of skills are protected under Article 19(1)(g) and Article 301 of the Constitution of India.

Council expects the report to be submitted before 10th September, 2022. However, the same is dependent on getting legal clarity. 

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in

Share

Recent Posts

Mutual Funds: SIP Inflows Breach Rs 19,000-Crore Mark for the First Time in February ’24

The systematic investment plan (SIP) contribution in February 2024 has crossed a new milestone. The monthly contribution tipped at Rs…

2 months ago

Income-Tax Return: A Brief Note on Annual Information Statement (AIS)

The Income-Tax (I-T) Department has directed taxpayers to access the Annual Information Statement (AIS) via the e-filing official portal and…

2 months ago

Mutual Funds: All About SIP and Market Fluctuations

Considering the vagaries of the stock market, investors often ponder over reevaluating their strategies. Whether to continue to remain invested…

2 months ago

Income-Tax Saving Through Strategic Life Insurance Planning

Financial planning is beyond just investing wisely to save on taxes; it's also related to protecting oneself and one's loved…

2 months ago

Income-Tax Return: Here’s a Note on Tax-Saving Avenues

A salaried individual earning up to Rs 5-15 lakh as net salary on an annual basis must first take stock…

2 months ago

A Quick Take on Equity-Linked Savings Scheme

Equity-linked savings schemes (ELSS), also referred to as tax-saving schemes, are equity funds that invest a significant portion of their…

2 months ago