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The Union Finance Minister Nirmala Sitharaman is expected to chair the 50th GST Council meeting in June, where the much-delayed discussion on the taxation on online gaming, horse racing, and casinos may finally be taken up. This issue was not addressed during the 49th GST Council meeting held in February, marking the second consecutive meeting where the topic was not discussed.
The 49th GST Council meeting was held at Vigyan Bhawan in New Delhi on February 18. Some important decisions taken at the meeting included the approval of the GST Appellate Tribunal and clearance of the pending GST compensation to states.
The absence of Meghalaya Chief Minister Conrad Sangma, the Group of Ministers (GoM) convenor responsible for reporting on online gaming, casinos, and horse racing, prevented the GoM report from being taken up in the last meeting.
Sangma submitted the revised GST report for the three gaming sectors in December, two days before the 48th GST Council meeting. However, due to the lack of time, the report was not circulated to all members and could not be discussed. The report was supposed to be a primary agenda item at the 49th GST Council meeting, but Sangma`s absence kept the matter in abeyance yet again.
After his party achieved impressive numbers in the assembly tally, without the support of the BJP, Sangma has returned as Chief Minister and is expected to attend the upcoming 50th GST Council meeting in the same capacity as the convener of the GoM on gaming.
Although no fixed date has been determined, official sources suggest that June is the most probable time for the next GST Council meeting. This is because, by then, most states would have completed their budget-making process, and significant progress would have been made in setting up the GST Appellate Tribunal. The recommendations for its establishment were adopted in the last meeting.
However, the resolution to the long-pending issue of indirect taxation on online gaming, casinos, and horse racing may not be achieved in the 50th GST Council meeting. The Finance Ministry has indicated the need for detailed deliberation on this matter. The GoM submitted the report but failed to reach a consensus on taxing real money online games and whether to consider them as games of skill or chance.
Currently, real money online skill games are taxed at 18% of gross gaming revenue (i.e., the platform fee charged by operators), while betting and gambling are taxed at 28%. Reports suggest that the GoM was inclined towards imposing a flat 28% GST on all three gaming sectors but couldn’t reach a consensus on the valuation methodology.
According to the industry, a higher tax rate equivalent to gambling and betting may hinder the growth of the online skill gaming sector.
This is a developing story. Keep following PokerGuru for more updates!
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