GST GoM to meet Bengaluru Turf Club representatives on June 23, visit casinos on June 24

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The ministerial panel (GoM) on GST on casinos, race courses and online gaming will meet on July 23 in Bengaluru and on July 24 in Goa to get industry perspective on taxation of horse racing and casinos, respectively. We earlier reported of the GoM having a two-day meeting in Bengaluru on June 23-24.

Bangalore Turf Club will likely make a presentation to the GoM on various aspects of the racing and issues related to GST, reported Financial Express. The Bengaluru Turf Club challenged Rule 31A(3) of the Central Goods and Services Tax Rules, 2017 before the Karnataka High Court and received favourable order last year. The Union of India has filed a Writ Appeal before a Division Bench of the Karnataka High Court which is currently pending.

Rule 31A(3) states that the value of supply of actionable claim in the form of chance to win in betting, gambling or horse racing in a race club shall be 100% of the face value of the bet or the amount paid into the totalisator.

Meanwhile, the Pax-India Turf Aficionados Association has written to the GoM head Conrad Sangma stating the current tax regime of 28% on the full face value of horse bet (under Rule 31A) was adopted without consulting the punters who are the most impacted.

In Goa, the GoM will likely visit casinos to get a first-hand experience of how the business operates.

The GoM, in its first report, submitted last month has recommended that in the case of online gaming, the activities should be taxed at 28% on the full value of the consideration, by whatever name such consideration may be called, including contest entry fee, paid by the player for participation in such games without making a distinction such as games of skill or chance etc. However, a re-examination was necessitated after Goa in the GST Council raised issues on the valuation of supplies in Goa.

Subsequently, on July 12, the GoM referred to the taxation issues raised by the industry representatives on the proposed tax rate increase on online skill gaming from 18% to 28% and issues related to casinos.