New Delhi: The GST Council in its meeting this week may consider the proposal of the state finance ministers’ panel on levying 28 per cent GST on online gaming, casinos and horse racing, sources said. The Group of Ministers, chaired by Meghalaya Chief Minister Conrad Sangma, has recommended that online gaming should be taxed on the full value of consideration, including the competition entry fee paid by the player for participating in the game.
In the case of Race Course, the GoM has suggested that GST be levied on the full value of bets deposited in the totalizers and kept with the bookies. (Also read: LIC stock wipes out assets worth over $18 billion after mega-IPO)
In casinos, the GOM recommends that the full face value of chips/coins purchased by a player from the casino be taxed. No further GST will be applicable on the value of bets placed in each round of betting, including bets placed against winnings in the previous round. (Also Read: Want Petrol? Get Token First! Sri Lanka Brings New Policy To Ration Fuel)
Also, the GoM suggested that a 28 per cent Goods and Services Tax be levied on the entry/access fee to the casino, which compulsorily includes food items/beverages etc.
However, alternative supplies, made independently of entry tickets, will be taxed at the rate applicable on such supplies, the sources said.
Currently, 18 per cent GST is levied on the services of casino, horse racing and online gaming. The GoM will decide on the mode of evaluation of services.
The government had in May last year constituted a panel of state ministers for better evaluation of services of casinos, online gaming portals and race courses for levying the Goods and Services Tax (GST).
AMRG & Associates senior partner Rajat Mohan said the 28 per cent tax bracket for online gaming, horse racing and casinos would put them on par with many sin goods such as pan masala, tobacco and aerated water.
“Taxing online gaming, horse racing and casinos on gross revenue instead of net value addition would be a departure from global tax ethics,” Mohan said.
This offer could sweeten the treasury for the time being; However, it will also entice the unorganized sector, leading to massive black money generation in the long run.
The report of the GoM is likely to be considered in the next meeting of the GST Council to be held in Chandigarh on June 28-29.
Other ministers of state in the 8-member GoM include Maharashtra Deputy Chief Minister Ajit Pawar, Gujarat Finance Minister Kanubhai Patel, Goa Panchayati Raj Minister Mauvin Godinho, Tamil Nadu Finance Minister P Thiaga Rajan, Uttar Pradesh Finance Minister Suresh Khanna and Telangana Finance Minister T. Harish Rao.