GST Council to informally discuss 28% tax on online gaming, casinos, horse racing in today’s meet

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The 52nd GST Council meeting is expected to see members deliberate informally on the current GST law amendment situation in various states with respect to online gaming, casinos and horse racing. A person aware of the matter said to Livemint that the Centre wants the new GST changes to come into effect smoothly.

The new 28% GST rate on full face value on initial deposits took effect starting October 1. However, not every state has implemented the same yet. This creates problems as these states will only be able to levy 9% SGST while the Centre will impose the new 14% CGST. As a result, there is a likelihood of confusion among online gaming firms regarding their tax liability.

There was some relief for the industry after the previous GST Council meeting which decided to levy the tax on initial deposits and not the winnings which are redeployed.

However, there are even bigger issues hovering over the Indian real money gaming startups now in the form of tax demand notices which are being issued by the Directorate General of GST Intelligence (DGGI). The authority has so far issued notices to top online gaming firms like Dream11, Games 24/7 and others.

The amounts demanded far exceed the revenue margins of these companies. As per industry analysts, the total amount demanded has passed the Rs 1 lakh crore mark.

Meanwhile, Delhi FM and AAP MLA, Atishi Marlena has announced that she would ask the GST Council members in today’s meet to review their decisions and seek withdrawal of tax notices as they could destroy the Indian online gaming industry.

The 52nd GST Council is being held at Sushma Swaraj Bhawan in New Delhi today.