West Bengal and Uttar Pradesh on Monday supported goods and services tax (GST) on online gaming, horse racing and casinos at a uniform rate of 28% on the full value of the consideration, without making a distinction between games of skill or chance, even as the group of ministers (GoM) on the matter sought legal advice, reported the Financial Express.
West Bengal is one of the few states where lottery is legal. The state earned Rs.10,839 Crores in the West Bengal alone for the period of 42 months from July 2017 to February 2021 in the form of GST. Lottery is taxed at 28% on the face value.
Online gaming industry is claiming that an uniform tax levy without distinction would be death knell to nascent skill gaming industry. The lottery distributor industry is a closed group which often acts against the interests of online gaming industry.
The All India Federation of Lottery Trade & Allied Industries (AIFLTAI), an umbrella organization of lottery distributors, stockists, agents, etc., in December 2021 has written to the GST GoM. The federation requested a uniform GST rate and method of valuation of services across all states of the country just like Income Tax and several other products in GST as well for lottery and gaming.
Now the stand of West Bengal in GoM raises doubts if it is influenced by the lottery lobby that generates thousands of crores to West Bengal in tax revenues. In fact, the uniform tax rate of 28% is what AIFLTAI is requesting since the implementation of GST.
West Bengal is the biggest market for the paper lottery business. Santiago Martin, the businessman known as the lottery king is believed to be funding TMC’s national expansion ambitions.
The revised GoM Report is delayed for more than two months now since the first report and uncertainty only impacts the skill gaming industry in a negative way.