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Group of Ministers (GoM) Exploring Separate GST Slabs For Online Gaming, Casinos & Horse Racing; Final Decision Expected This Month

Meghalaya CM Conrad Sangma chairs the GoM meeting
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  • Namita Ghosh September 6, 2022
  • 2 Minutes Read

The Group of Ministers (GoM) on casinos, race courses, and online gaming held another meeting in New Delhi on September 5. In what comes as a welcome relief for the country’s gaming sector, the GoM seems to have shifted its initial stance of applying a uniform GST slab on the three gaming sectors and may come out with separate GST slabs for each!

The GoM has also sought legal opinion before submitting its final report to Central GST Council before its next meeting, scheduled in Madurai later this month.

Following the meeting, the GoM chairman, Meghalaya CM Conrad Sangma, tweeted images and details of the proceedings.

Talking to reporters after the meeting, Sangma clarified that the GoM had been asked to look into the three gaming verticals separately as they operate differently. “We are talking of three different games. All games are not the same. And this GoM has been asked to look into three separate games which function in three very, very different ways. The gross gaming revenue applies to casinos, you know. The methodology on where and how GST should be collected are areas that we are looking at. So all these things are being debated.”

He also said that the GoM was “hopeful” to finalize its recommendations for the GST Council within 7-10 days, adding – “All three are totally different activities. The methodology by which they work is totally different. Yes, rates also can be different.”

Goa Transport and Industries Minister Mauvin Godinho also attended the meeting. The state is one of the two in the country to permit casinos to operate. In the last GST Council meeting, Goa CM and Finance Minister Dr. Pramod Sawant highlighted the need for the Council to treat casinos separately from others in computing the GST.

After the latest GoM meeting, Godinho said, “I think it is an internationally accepted practice, there is no doubt about that, but how the mechanism is to be worked out is the issue; we are applying our minds, and there is an element of legal opinion also being taken to shore things up further.”

Mauvin Godinho
Mauvin Godinho

Reacting to the news, CEO of All India Gaming Federation, Roland Landers, told the New Indian Express – “GoM recognizing the constitutional and legal difference and nuances of online games is very promising. As an apex industry body for online gaming, AIGF is very hopeful that the GoM will arrive at a progressive and constitutionally sound recommendation for rate and valuation for our industry.”

Roland Landers
Roland Landers


A Ray of Sunshine?

Headed by Meghalaya Chief Minister Conrad Sangma, the GoM includes Maharashtra Deputy CM and Finance Minister Devendra Fadnavis, Gujarat Finance Minister Kanubhai Patel, Goa Panchayati Raj Minister Mauvin Godinho, Tamil Nadu Finance Minister P Thiaga Rajan, UP Finance Minister Suresh Khanna, and Telangana Finance Minister T Harish Rao.

The GoM had initially recommended a uniform GST of 28% for online gaming, casinos, and horse racing. The following were the GoM recommendations:

> For casinos, 28% GST is to be charged at the total face value of chips or coins purchased from the casino by a player. No further GST is to be applied to the value of bets placed in each betting round, including those played with winnings from previous rounds.

> A flat 28% GST on casinos, race courses, lottery, and online gaming

> GST to be charged on the entry fee paid by the player to enter a fantasy match or a poker tournament.

> No distinction be made on games of “skill” and “chance” when levying GST

> For race courses, GST to be computed on the total value of bets is to be pooled in the totalizator and placed with bookmarkers

However, the same was met with opposition during the GST Council meeting in June-end. Following this, the Council deferred its decision on taxation and asked the GoM to take a relook at its recommendations.

The GoM invited representations from stakeholders and held a virtual meeting of members on July 12. It then went through the submissions by the Turf Authorities of India on horse racing and even visited the turf facilities in Bengaluru. The GOM held a two-day session in Bengaluru and Goa on July 23 – 24 to get an industry perspective, followed by another meeting on July 25.

While it looked like the GoM has stayed firm on a uniform 28% GST on the three sectors, the GoM reportedly decided to make an exception for casinos in computing the GST. Unconfirmed reports suggest the GoM was agreeable to evaluate GST on casinos on the actual betting component and not the total consideration that may include other bundled goods and services.

The GoM head Conrad Sangma met Union Finance Minister Nirmala Sitharaman last month, and basis his appraisal, she postponed the GST Council meeting to September.

Meghalaya CM Conrad Sangma and Union Finance Minister Nirmala Sitharaman
Meghalaya CM Conrad Sangma and Union Finance Minister Nirmala Sitharaman


Sources suggest that the GoM has acknowledged the legal implications of imposing a uniform GST slab on the three gaming sectors and is ready to consider different GST rates. The group plans to submit its report within the next ten days, and the GST Council will discuss the recommendations in its next meeting, scheduled to be held in Madurai later this month.

This is a developing story. Keep following PokerGuru for the latest updates!

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