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“GST Amendment Bill Cleared: 28% Tax on Online Gaming, Casinos & Horse Racing”

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The Union Cabinet on Wednesday cleared a bill to amend laws to bring clarity related to the uniform 28 per cent GST at full face value for online gaming, casinos and horse racing, government sources confirmed. The statutes to be amended through the latest bill include CGST, IGST and UT GST laws.

The bill is expected to be introduced during the remaining days of the monsoon session of Parliament. The GST Council, in its meeting on July 11, recommended taxing casino, horse racing and online gaming at the uniform rate of 28 per cent. Tax will be applicable on the face value of the chips purchased in the case of casinos, the full value of the bets placed with the bookmaker/totalisator in the case of horse racing, and the full value of the bets placed in online gaming. The mechanism was further approved at the next meeting of the council on August 2

“Suitable amendments to be made to the law to include online gaming and horse racing in schedule III as taxable actionable claims,” the council recommend.  Further, it recommended inserting a specific provision in IGST Act, 2017, “to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India for the said supplier through a simplified registration scheme and also for blocking of access by the public to any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier in case of failure to comply with provisions of registration and payment of tax”.

It was also said that the valuation of supply of online gaming and actionable claims in casinos may be based on the amount paid or payable to or deposited with the supplier, by or on behalf of the player (excluding the amount entered into games/ bets out of winnings of previous games/ bets) and not on the total value of each bet placed. The council recommended that CGST Rules, 2017, may be amended to insert specific provisions for valuation of supply of online gaming and supply of actionable claims in casino accordingly. The council also recommended issuance of certain notifications/ amendment in the notification related to the issue.

Once the Centre amends the CGST, IGST and UT GST laws, then the states and two Union territories with Assemblies will be required to bring similar changes in SGST Acts. After the legislative changes, detailed rule will be announced.  The target is to complete all these steps by the next month-end to ensure implementation from October 1, 2023.

On August 2, during a GST Council meeting, Delhi asked if the taxation matter, especially pertaining to online gaming, could be referred back to the group of ministers (GoM). Ministers from Goa and Sikkim called for a review of the 28 per cent rate on the entire face value as against gross gaming revenue (GGR or service fee charged) in the case of casinos, as this would hurt their interests, given that they are small states. Andhra Pradesh reportedly called for a “large heart” to consider the valuation base. In view of these developments, the mechanism will be reviewed six months from the date of implementation.

The mechanism is expected to step up revenues. Revenue Secretary Sanjay Malhotra had earlier said that last year (2022-23) the exchequer collected only Rs 1,700 crore as GST, and this could have been Rs 15,000-20,000 crore had the tax been levied on the full value.





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