MoS Finance Pankaj Chaudhary answers questions in Parliament on 28% GST on online gaming

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Congress MP Manish Tewari questioned Minister of State for Finance Pankaj Chaudhary in the Lok Sabha on Monday over 28% GST on online gaming, casinos and horse racing.

Tewari asked if the government is engaged in any deliberations regarding the imposition of the new tax rate and whether the government has contemplated the consequences of the same, that is, potential harm or loss of jobs.

Chaudhary responded by saying that the GST rates are recommended by the Council, comprising members from Central and state/UT governments. The 50th GST Council meeting on July 11 decided to levy 28% GST on full face value for aforementioned activities after detailed deliberations.

Tewari further asked if the new tax rate will be levied on all forms of gaming, be it games of skill or games of chance. If that is the case, will the government treat skill-based games on par with gambling or any other chance-based games? He further asked if the government differentiates between skill-based games and chance-based games, on what basis will the categorization be done?

Chaudhary answered that the GST Council decided to levy the tax on actionable claims as part of casinos, horse racing and online gaming regardless of their nature. Since all activities are considered as actionable claims, there is no need to categorize games of skill and games of chance separately.

Moreover, the Revenue Secretary has already shared that the decision of the Council was unanimous and the levy will be on full face value. Despite that, online real money gaming companies have asked for reconsideration of the decision, hoping to get some form of relief.

Chaudhary responds to AAP MP and former cricketer Harbhajan Singh in Rajya Sabha on same issue

During Rajya Sabha proceedings today, Chaudhary clarified further doubts regarding the new GST rate. AAP MP and former cricketer Harbhajan Singh asked if there was any study conducted before deciding on the current tax rate for online gaming, and if so, asked the minister to share the details. He further asked if the impact of the decision would force gamers to switch to illegal offshore betting platforms.

Chaudhary informed that detailed deliberations were done by the GST Council based on the GoM report. Responding to the question of players opting for illegal gambling platforms, he said that they have received similar concerns from stakeholders. Chaudhary further said that “sufficient enforcement provisions exist to take action against offshore platforms, which do not pay prescribed GST”.

Meanwhile, the GST Council will be meeting again tomorrow to decide the manner in which tax on full face value will be levied.