GST Council likely to meet in June to decide online gaming tax

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The Goods and Services Tax (GST) Council, the apex decision making body under GST Law is likely to hold its next meeting (50th)  in June where the long pending issue of taxation of online gaming, horse racing and casinos may be taken up. The 49th GST Council meeting took place in February during which the matter could not be taken up for a second consecutive meeting.

The 49th meeting couldn’t take up the matter as the Group of Ministers (GoM) chair Meghalaya Chief Minister Conrad Sangma was absent due to elections in Meghalaya. He returned as Chief Minister recently after his party posted impressive numbers in the assembly tally. He is now expected to attend the 50th meeting in same capacity.

While no definite date has been decided as of now, official sources indicated that June is the most likely time for holding the next meeting of the Council as by then most states would have completed their budget-making process. Further, there would also have been significant progress in setting up the GST Appellate Tribunal – the recommendations for which were adopted in the last meeting.

Even the 50th meeting may not lead to the long expected resolution as the Finance Ministry indicated the need for detailed deliberation. The GoM which submitted the report couldn’t arrive at consensus on how to tax online games and whether to consider it as a game of skill or game of chance.

At present, online skill gaming is taxed at 18% of gross gaming revenue (i.e., platform fee charged by operators) while betting and gambling is taxed at 28% on full amounts. Reports indicate that the GoM was inclined in favour of 28% GST on full value but couldn’t arrive at consensus.

A higher rate of tax on par with gambling and betting according to industry may impede the growth of the online skill gaming sector.