GST Council to meet on June 28-29, may decide on GST for casinos, online gaming, and racecourses

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The GST Council, headed by Finance Minister Nirmala Sitharaman, will meet on June 28 and 29 in Srinagar, tweeted the finance minister’s office on Thursday. This will be the second time that the GST Council meeting is being held in Srinagar. Before the launch of the Goods and Services Tax (GST) on July 1, 2017, the 14th meeting of the Council was held on May 18 and 19 in the city.

The 47th GST Council meeting assumes significance for the real money gaming industry as it is expected to deliberate the report of the Group of Ministers (GoM) formed to recommend rationalisation of taxation rate on casinos, race courses and online gaming. The GoM is expected to submit the report to the Finance Minister anytime soon.

Currently, skill games are charged at 18% while gambling and lottery are charged at 28%. The tax is currently imposed on the service fee a platform charges for its online gaming services, and not on the winning amount. For now, there is no clarity on whether the existing practice will be retained or as suggested by the Department of Revenue, the tax will be levied on the gross entry amount.

Earlier, the Group of Ministers on lottery, formed in January 2019, in its report mentioned that it received miscellaneous representations similar to lottery. It recommended that the rate and valuation issues of casinos, horse racing, online gaming and betting may be referred to Fitment/Law Committee, and then taken to GST Council, either directly or through GoM as approved by the Union Finance Minister.

Later, the issue figured prominently in the 35th and 37th GST Council Meetings held on June 21, 2019, and September 20, 2019, respectively. In the September 2019 meeting, the Fitment Committee (a sub-committee of the council comprising officials to prepare recommendations on rate proposals) considered a proposal for reducing GST to 18 per cent from 28 per cent on wagering in horse racing, besides excluding prize money from the taxable value of horse racing but deferred the decision. Finally, a GoM was constituted in early last year to recommend the tax rate for casinos, online gaming, and horse racing.