GST Council to discuss tax rate on online gaming in upcoming meeting on July 11: Govt official

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The 50th GST Council meeting will be held on Tuesday, July 11 and is reported to discuss the tax rate on online gaming, casinos and horse racing. The Group of Ministers (GoM) report, which was submitted in December last year, will also be taken up for discussion.

As of now, the GoM report, convened by Meghalaya Chief Minister Conrad Sangma, recommends a 28% GST rate on contest entry amount (CEA) on all forms of online gaming, be it skill-based or chance-based. The rate was decided upon unanimously by the GoM.

The previous three Council meetings were unfortunately not able to finalize the tax rate which has left the industry anxious. In the meantime, MeitY has also released new online gaming rules which might further play a role in finalising the tax rates.

“The issue has been pending for a long time. It will be taken up by the council. We are clear on the legal stance, but it is difficult to comment on the outcome since it is in the hands of states,” a government official said as quoted by Business Today.

The online gaming industry does not agree with the GoM report’s recommendation, calling it not in line with industry standards at the international level. The industry, as a whole, believes that the 28% tax rate should be levied on Gross Gaming Revenue (GGR) and not on CEA.

A report by Indian law firm Lakshmikumaran & Sridharan (LKS) Attorneys also highlighted the need for a fair taxation policy. The report also stated that tax is levied on GGR internationally and so it should be levied on the same in India, too.

We have compiled a list of 10 individuals who can influence the GST Council’s decision on July 11. Click here to know about them.