Rajeev Chandrasekhar lauds GST Council, FM; terms decisions as ‘good steps in evolving framework’

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Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar lauded the decisions taken by the GST Council and Union Finance Minister Nirmala Sitharaman in the 51st meeting of the Council on Wednesday, August 2.

Chandrasekhar appreciated the moves to tax only the initial deposits and the idea of reviewing the implementation after six months. He also called the decisions a good step towards evolving the framework which will allow the expansion of permissible online gaming startups and encourage innovation along with putting a stop to illegal betting and gaming addiction.

With a near unanimous consensus, the Council decided to keep the tax at 28% on full face value but levy it on the initial deposits only. Majority of the states were asking for early implementation, but Goa and Sikkim asked for a reconsideration to levy the GST on gross gaming revenue (GGR) of casinos while being in support for 28% tax rate. Delhi, however, asked for a complete review of the decisions taken on July 11, in the 50th meeting.

Tamil Nadu, meanwhile, asked for a provision to be made in the GST laws to take into account its ban on online gaming in the state.

Sitharaman stated that even if the tax rate is increased to 28% but is levied on GGR, the government will only be collecting around 11%-12% which is lower than what it collects on some essential goods for households. Since it is gaming, it involves wagering and so deserves to be taxed more, she explained.

The new tax rate is expected to come into effect from October 1 as the lawmakers will now work towards bringing in necessary amendments in central and state GST laws. It is also to be noted that payments done through virtual digital assets in online gaming will also attract the same GST rate.

On the topic of offshore gaming platforms, revenue secretary Sanjay Malhotra said that they will have to register with the GST authorities to operate, else they will be blocked under provisions of the Information Technology Act.