Punjab FM Harpal Singh Cheema reveals state backs GST Council’s decision on online gaming strongly

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Punjab finance minister Harpal Singh Cheema revealed that the state government is in full support of the GST Council’s decision to tax the online gaming sector at 28% on full face value amount. The decision, or the clarification as it is being termed by the government, was taken during the 50th GST Council meeting on July 11.

“On the issue of taxation of online gaming, the impact it has on the youth of the country and the cause of concern the unregulated mushrooming of this sector can have on the social fabric of the country was highlighted,” said Cheema on Wednesday as quoted by The Times of India.

Cheema made it clear that the state strongly backed the proposal to levy the tax on full face value and not gross gaming revenue (GGR).

Earlier, revenue secretary Sanjay Malhotra also stated that the decision was taken unanimously. While some states opposed the idea of taxing at full face value, the majority of the states agreed to it.

A draft of the amendment to the GST law has also been sent to the states for comment and according to Malhotra it will be introduced during the monsoon session of the Parliament, starting July 20.

Online gaming companies are strongly opposing the decision to charge the tax on full face value and are dubbing this as the end of online gaming in India. The companies had been urging for tax to be levied on GGR. The current method, according to them, will increase the tax burden for all, making it hard for emerging gaming startups to survive in the industry.

When it comes to the casinos, Goa Transport Minister Mauvin Godinho also stepped in saying he has talked to the Chief Minister who will take up the issue with the GST Council for reconsideration. The gaming companies are expected to follow suit.