Online gaming, Casino & Horse Racing to attract 28% GST on full bet value

Online gaming, Casino & Horse Racing to attract 28% GST on full bet value

Online gaming, Casino & Horse Racing to attract 28% GST on full bet value

Central Board of Indirect Taxes Chief Vivek Johri said on Saturday that online games where winning depends on a certain outcome would attract 28 % GST on the full bet value.

Though the report of the Group of Ministers on online gaming did not come up for discussion at the GST Council meeting, the department would go by the view that 28 % GST is payable on full bet value put in by a player, and not net of margins.

According to sources, although the report submitted by the GoM on online Gaming, Racecourses, and Casinos is of divergent nature, the Government’s opinion is clear on this matter.

The comments undertake significance as the GTPL (Gameskraft Technology Pvt Ltd) GST evasion case is still pending in the court.

Directorate General of GST Intelligence (DGGI) issued a show cause notice to Bengaluru-based online gaming company GTPL in September, for not paying GST to the tune of Rs 21,000 crore.

According to the CBIC, Gambling and lottery cannot be distinguished. Casinos, online gaming, and race courses all have a common thread of gambling, which is categorized as part of the lottery for GST purposes.

"The gaming activity is considered as gambling because the winning is dependent on a certain outcome," Johri said.

The report of the GoM could not come up for GST Council discussions since it came in just 2 days ahead of the meeting and thus could not be circulated to the states. Generally, the GST Council secretariat gives notice to GST Council members before tabling any agenda.

The GoM, in its last meeting held in November, had agreed on a 28 % GST rate on online gaming, horse racing, and casinos 

However, in absence of consensus on whether the tax should be levied on only the fees charged by the portal or the entire consideration, including the bet amount, received from participants, the GoM had decided to refer all suggestions to the GST Council for a final decision.

After Briefing the reporters at the 48th GST Council meeting on Saturday, Finance Minister Nirmala Sitharaman said the GoM report would be "discussed threadbare" when the Council takes it up for discussion.

Source: CNBC-TV18


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