Payments received and winnings paid in virtual digital assets (VDAs) by casinos and online gaming companies are likely to be brought under goods and services tax when the GST Council clarifies the rules on August 2, officials said.
The move is aimed at bringing both overseas and domestic online gaming companies that accept and make payment in VDAs such as cryptocurrency under GST, they said.
The GST Council, which approved a 28% levy on July 11 on online gaming, casinos and horse racing on full face value, will meet virtually on August 2 to clarify the definition of online gaming.
It is likely to provide a clear definition of “online gaming” and “online money gaming” by amendment in the CGST Act to rule out any future discrepancy, officials said.
According to them, online money gaming is expected to be defined as online games where players pay, deposit or receive money or money's worth, including virtual digital assets, in the expectation of winning money.
This will also cover any experience or any kind given to players, which will be equivalent to the monetary value of that gift or experience offered to player as “prize”.
This will also define GST for casinos and online casinos, which transact in virtual digital assets, officials said.
Considering now we have our own CBDC (central bank digital currency), it is important to include it in definition,” an official told ET.
The GST Council decided to meet again on August 2, considering difficulties in determining the full face value in cases where the player is using previous winning amount for another game.
The Industry earlier this week wrote a letter to the revenue secretary saying that levying 28% tax on every game will lead to repeated taxation of the same rupee, resulting in the effective tax rate going as high as 50%-70%.
“We will put forward the concerns of the industry by proposing taxation on deposits, which will take away many difficulties, but the final call in this regard will be taken by the GST Council,” said the official quoted above.
Source: The Economic Times https://economictimes.indiatimes.com/tech/technology/game-payment-winnings-in-virtual-digital-assets-to-attract-gst/articleshow/102215249.cms?from=mdr
Payments received and winnings paid in virtual digital assets (VDAs) by casinos and online gaming companies are likely to be brought under goods and services tax when the GST Council clarifies the rules on August 2, officials said.
