GST Council to decide on taxing initial deposit or every bet: Revenue Secretary

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The GST Council in its 50th meeting, recommended a levy of 28% GST uniformly on the total game value for online gaming, horse racing and casinos, irrespective of whether they are games of chance or games of skill. The proposal was for taxation on full face value while currently gaming companies are subject to tax on gross gaming revenue.

However, ambiguity prevails on the interpretation of the term ‘full face value’. Whether gaming companies are required to tax once at the time of making a deposit to the wallet or every time a fresh entry is made to a game or contest.

Now as per reports, the GST Council will decide about determination of face value on online gaming whether on entry level or every contest entry. Fitment committee will submit a proposal which will be put up before GST council in its next meeting. Council meetings in recent times are held irregular intervals and the next meeting may require another three months.

Addressing the concerns of the industry, Revenue Secretary Sanjay Malhotra today said that the issue has already been pending for the last two years despite that, he says it was surprising to see a unanimous consensus between all the member states and the union.

Speaking exclusively to NDTV, Malhotra explained, “This was a well considered decision by GST and we have done this after lots of discussion. We have spoken and met to the online gaming industry too.”

Malhotra said the officers will meet to deliberate on taxing every bet or limiting it to only initial deposit. The industry argues that taxing every bet will result in a deathblow to the sunrise sector which has received billions of dollars as investment in recent times.

Government not deciding on the taxing event also means the implementation of the proposal may be delayed giving room for the industry to present their grievances.