Goa suggests 18% GST rate on online gaming, differs from other GoM member states

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The next GST Council meeting is slated to be held on July 11 and the matter related to the taxation of online gaming, casinos and horse racing is most likely to be discussed. The meeting will be chaired by the Union Finance Minister, comprising her state counterparts.

The Group of Ministers (GoM) consists of members from eight states that include Meghalaya, West Bengal, Uttar Pradesh, Goa, Tamil Nadu, Telangana, Gujarat and Maharashtra. Most of the states agreed with the GoM’s report recommending a GST rate of 28% on contest entry amount (CEA) but Goa has suggested maintaining the current rate of 18%.

While the majority of the states suggest a 28% tax rate, views on how it should be levied differ among them. West Bengal and Uttar Pradesh suggested that the tax should be levied on full face value of the bets placed or money spent.

Gujarat suggested it should be levied on platform fees while Meghalaya called for tax on the gross gaming revenue (GGR) or platform fees or commission charged by casinos, online gaming companies and horse racing.

Goa, on the other hand, suggested a 28% tax rate on casinos’ GGR but 18% on platform fee/service charge imposed by online gaming operators. Goa also suggested contributions to the prize pool can be considered as supply which will not attract GST, reported Business Standard.

Tamil Nadu and Telangana believe that if the Council decides all the three activities as not actionable claims of betting and gambling, a rate of 28% on GGR should be levied. Maharashtra believed that there should be no differentiation in the policy regardless of skill-based and chance-based games.

The online gaming companies do not dispute the GoM’s recommendation when it comes to the rate of 28% but they suggest levying it on the GGR value. Some stakeholders argue that 28% GST rate on CEA will kill thousands of startups in the gaming sector and disrupt its growth.