Union finance minister Nirmala Sitharaman after the 51st meeting of the GST Council meeting held in New Delhi announced that 28 % GST on casinos and online gaming will be levied on the face value. She said the 28 % GST on online gaming and casinos is expected to be implemented from the 1st of October. There would be a review of the levy after six months of its implementation.
Sitharaman said the Delhi finance minister opposed the levy of the tax on online gaming while Goa and Sikkim wanted the levy on GGR (gross gaming revenue) and not on face value. However, other states including Karnataka to Gujarat, Maharashtra and Uttar Pradesh wanted the decision taken at the last meeting to be implemented. Maharashtra Deputy Chief Minister Ajit Pawar, who holds finance and planning departments, told this correspondent that the state government supports the GST Council’s proposal to impose tax on online gaming and casinos.
‘’There were ministers who felt that we should implement the decision of the 50th GST Council at the earliest. The Secretariat will work together and we will get an amendment to CGST taken up at the earliest and hopefully in this session. October 1 is when the implementation (levying of 28% tax on all the gaming, betting related activities on face value) is expected, by the time the states will also pass their amendments to the state laws,’’ said Sitharaman.
According to Sitharaman, the council recommended that valuation of supply on online gaming & actionable claims in casinos may be done based on the amount paid or payable or payable to or deposited with the supplier by/or on behalf of the player, excluding the amount entered into the games, bets out of winnings of previous games and not on the total value of each bet placed.
The GST Council recommended certain amendments in the CGST Act 2017 and IGST Act 2017, including amendment in Schedule III of CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming. The Council also recommended to insert a specific provision in IGST Act, 2017 to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India for the said supplier through a simplified registration scheme and also for blocking of access by the public to any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier in case of failure to comply with provisions of registration and payment of tax.
The Council also recommended that valuation of supply of online gaming and actionable claims in casinos may be done based on the amount paid or payable to or deposited with the supplier, by or on behalf of the player (excluding the amount entered into games/ bets out of winnings of previous games/ bets) and not on the total value of each bet placed. The Council recommended that CGST Rules, 2017 may be amended to insert specific provisions for valuation of supply of online gaming and supply of actionable claims in casinos accordingly.
The Council also recommended issuance of certain notifications/ amendments in notification related to the issue. It was also decided by the Council that effort will be made to complete the process of making amendments in the Act at the earliest and bring the amendments into effect from October 1, 2023.
