Online gaming taxes as the single point agenda on 51st GST Council meet

The 51st GST Council Meeting was held through video-conferencing under the leadership of Union FM Nirmala Sitharaman. The FM attended the Council meeting from New Delhi. The meeting was held within a month of the last, on 11th July.

The Union FM held a media briefing on the highlights of the 51st GST Council meeting at the National Media Centre around 7:15 p.m.

The Union Minister of State attended the meeting for Finance, Shri M P Chaudhary, apart from the Finance Ministers of States and UTs (with Legislature) and Senior officials from Union Government and States. Various issues were deliberated during this meeting to review GST rates and quality improvement.

The GST Council approved the proposed agenda for the 51st GST Council meeting. It has promised to revisit the GST rates decided for online gaming after six to eight months instead of revisiting it now.

Deliberations on taxing all betting-related activities, horse racing, and casinos were decided recently only after three years of Group of Ministers (GoM) deliberations. The 51st GST Council meeting did not modify the GST rate at 28% for online gaming but clarified its valuation.

Goa and Sikkim, showing huge interest in casinos, were concerned about hiking tax rates from 18 to 28%. These states seemed aligned with higher tax rates but wanted it against Gross Gaming Revenue (GGR).

Tamilnadu FM had apprehensions about taxing online gaming and the rest at 28% and needed more clarification on procedural aspects. Most states wanted immediate implementation of the 50th GST Council meeting as the discussion continued for the last three years. Delhi, Goa, and Sikkim were concerned that the earlier decision was not unanimous.

FM mentioned that 1st October could be the effective date for implementing a higher tax rate of 28% on face value, but the Council will return after six months to review the progress and effectiveness of implementation.

A major decision was regarding the valuation of online gaming supply and actionable claims in casinos. It may be done based on the ‘amount paid or payable or payable to or deposited to the supplier by the player or on behalf of the supplier at the entry stage.

FM commented that 18% on the GGR resulted in 7-8% of net revenue. Also, 28% of GGR will result in 11-12% of net revenue. These rates are lesser than rates charged on a few necessary household items.

Entry 6 of Schedule III will include online money gaming in online gaming, alongside horse racing, casinos, and betting. As expected, clear definitions will be given to terms such as online money gaming and virtual digital assets in the CGST Act. FM further hinted that the CGST law will undergo amendments during the monsoon session of the Parliament.

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