16.02.2023: GST Council: Report on online gaming, casinos, race courses not on the agenda

The GST Council-nominated Group of Ministers (GoM) report on taxation of online gaming, casinos and race courses is not yet on the agenda of the GST Council, which will meet on February 18, sources told CNBC-TV18 on Wednesday. The sources further said that it is possible that some states may seek the intervention of the GST Council chairman to begin discussions on the report.

In addition, the proposal for reducing the GST rate on cement is also not part of the current GST Council agenda. However, the GST Council-nominated fitment committee is expected to deliberate on the matter and present its recommendations in the next GST Council meeting.
The GST Council is responsible for making decisions related to GST rates, rules, and regulations, and any changes to these policies require a consensus among the council members. The decisions made by the council can have significant implications for businesses and consumers in India.
The report on taxation of online gaming, casinos and race courses was submitted by GoM convener Meghalaya Chief Minister Conrad Sangma to Union Finance Minister Nirmala Sitharaman in December.
Sangma, after presenting the report, said that the GoM could not arrive at a consensus and has presented the report with divergent views. He further added that it is now for the GST Council to take a final decision in the matter.
Some of the divergent views by the member states mentioned in the report, especially on online gaming, included that of Goa, which “has expressed the view that the ‘contribution towards prize pool' may be treated as supply not liable to levy of GST.” On the other hand, West Bengal and Uttar Pradesh have expressed to the GoM that “activities of online gaming may be taxed as supply of actionable claims in the form of betting and gambling irrespective of whether the online games involve betting on a game of skill or a game of chance”.
GoM member state Tamil Nadu has expressed that “in case a view is taken that horseracing and online gaming are games of skill and not actionable claims of betting and gambling, taxing the Gross Gaming Revenue (GGR) at 28 percent should be adopted and mechanism for determining the taxable value was also proposed”.
The GoM in its report further mentioned that the panel tried to arrive at a broad agreement that supplies may be taxed at the highest rate of 28 percent, but later on failed to arrive at a consensus.
The GoM report has also made it clear that the council can consider “levy of GST may be only on the GGR in case of Casinos and part of transaction what is relatable to service, where the services are commission/platform fee/Gross Gaming Revenue”, the sources added.
The GoM has also added that the member states have felt that considering the cascading effect of taxation not only on the main sectors of casinos, race courses and online gaming, but also on ancillary sectors and industries like tourism, transport, entertainment, etc, for its viability and long term growth prospects in the larger interest of our economy, having an escrow account facility can help, sources added.
Source: CNBC TV18

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