Crucial GoM meet today to decide taxation of casinos, online gaming and racecourses

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The Group of Ministers (GoM) formed to examine the GST issues in casino, online gaming, and racecourses will meet today to decide on the tax rate.

In May of last year, the government established a panel of state ministers to improve the assessment of casino, online gaming, and racetrack services. The GoM met early this month, led by Meghalaya chief minister Conrad Sangma, to consider the applicable GST rate on these three services.

In the earlier meeting on May 2, the GoM was unanimous on hiking the GST rate on these services to 28 per cent. Currently, skill games are taxed at 18% while gambling is taxed at 28%.

The GoM left the method of valuation of supplies to a Fitment Committee comprising of senior officials from state governments and the central government.

The Fitment Committee will deliver their recommendations to GoM on whether GST on online gaming should be charged on contest entrance fees or total gaming revenue.

Yesterday, reports emerged that the Tax Research Unit (TRU) of the Department of Revenue of the Finance Ministry has recommended charging 28 per cent of the gross Contest Entry amount.

The Internet and Mobile Association of India (IAMAI) on May 16 has urged the Goods and Services Tax Council to maintain the 18 per cent GST rate on online gaming. The IAMAI in a press release said that GST should continue to be levied on platform fee only at 18 per cent and any hike in GST rates shall be “detrimental to the overall wellbeing of the industry, seriously impacting the industry’s contribution to the nation’s economy through revenue generation, livelihood creation and foreign investments.”