Govt’s GST lawyer gets extension for three years, argued for 28% tax rate on real money gaming

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As the government prepares to approach the Supreme Court to get a clarity on taxing online real money games, a key government lawyer in the process has been given a three year extension in office through notification dated 30 June 2023.

N. Venkatraman, the additional solicitor general of India till 30 June 2023 argued for the government claiming 28% tax rate in the GamesKraft Rs. 21,000 crore tax case before Karnataka High Court. The government now wishes to appeal against the order to Supreme Court. A similar matter is pending before the Punjab & Haryana High Court involving opinion trading platform Probo which went in favour of the Company in the interim stage. Reports indicate that the government plans to club all these matters in an appeal before the Supreme Court.

Venkatraman’s new term commencing on 1 July 2023 as the ASG will be valid till June 2026 and it is expected that he will be appearing in these matters on behalf of the government. On numerous occasions he has vociferously argued for 28% tax rate on full entry fees for online real games terming them as gambling.

The extension also comes at a time when government is expected to deliberate on the taxing aspect through GST Council. The Council is scheduled to meet on July 11. 

For the past two meetings – in December 2022 and February 2023, the gaming industry expected the GST Council to take up the discussion on taxing online gaming, casinos, and horse racing.

A panel of state ministers (GoM) set up to examine the taxation issue had agreed on a 28 per cent GST on online gaming. However, in the absence of a consensus on whether the tax should be levied on only the fees charged by the portal or the entire consideration, including the wager amount received from the players, the panel decided to refer all suggestions to the GST Council in December 2022 for a final decision. The 48th GST Council in December did not take up the matter.

The report was then planned to be discussed in the 49th GST council meeting in February but was delayed after Meghalaya’s Chief Minister Conrad Sangma who headed the GoM was not able to attend due to election in Meghalaya.