The panel of state finance ministers is likely to recommend a uniform GST levy of 28 per cent on online gaming irrespective of whether it is a game of skill or game of chance, sources said.

However, it is likely to suggest a revised formula for calculating the amount on which the Goods and Services Tax (GST) would be levied.

Currently, online gaming attracts 18 per cent GST. The tax is levied on gross gaming revenue, which is the fees charged by online gaming portals.

Sources said that the GoM report is almost final and would be submitted to the GST Council soon for consideration.

The Group of Ministers (GoM), chaired by Meghalaya Chief Minister Conrad Sangma, had in its earlier report submitted to the Council in June suggested a 28 per cent GST on on the full value of the consideration, including contest entry fee, paid by the player, without making a distinction such as games of skill or chance. However, the Council had asked the GoM to reconsider its report.

Following that the GoM took the views of the Attorney General and also met stakeholders from the online gaming industry.

Although the GoM deliberated on separate definitions for ‘games of skill' and ‘games of chance', it finally decided to tax both as demerit goods attracting a 28 per cent GST.

The message has to be clear that online gaming is a demerit good. However, some relaxation in valuation methods could be provided, sources told PTI.

Source: LiveMint 
https://www.livemint.com/news/india/panel-may-recommend-28-gst-on-online-gaming-tweak-in-calculation-method-11669105189226.html