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‘Online gaming will be taxed at face value’ – Revenue Secy Sanjay Malhotra

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Revenue Secretary Sanjay Malhotra recently talked about the GST council’s decision to tax online gaming at 28%.

Malhotra told that the issue has already been pending for the last two years despite that, he says it was surprising to see a unanimous consensus which came after extensive deliberation on the topic.

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.”

He also explained how the tax will be levied. Malhotra said that the council has not decided if the tax will be on initial deposit or each and every bet, but they conducted meetings with gaming industry representatives to discuss the matter.

He acknowledged that tax every bet will make it much more expensive and will be kept in mind while taking the final decision on how it will be levied. The decision will be taken by the council as a whole.

One thing Malhotra clarified is that the tax will not be on gross gaming revenue (GGR). This means that it will either be on the full face value of the initial deposit (entry level) or every bet. The decision is also expected to be taken soon.

On the matter of people worried about double taxation, Malhotra also believes that in a way, it can be said double taxation.

Addressing the MeitY’s concerns, he said that while the GST council have not received anything in writing from them yet but when it does, the council will look into the matter. In his opinion, while MeitY is trying to distinguish between permissible and non-permissible games, the real issue is differentiating between these permissible games.

Discussing on the same topic, the GST council decided that games that are not played for money regardless if they are played online or offline will be taxed at 18%, while games that are played with intent of earning money will be taxed at 28%.

“There is a lack of communication. We are not taxing recreational games. Where there is no money involved, taxes will remain at 18 per cent,” Malhotra said.

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