Gambling to become costly; State Finance ministers recommend 28% GST on online gaming, racecourses, and casinos
On May 19, a group of state finance ministers set up to explore the quantum of GST and mode of taxation on casinos, racecourses, and online gaming met in Delhi. In the meeting, convened made a final decision, and the finalised paper has been sent to the Goods & Services Tax (GST) council for approval.
As per the recommendation, there included a GST of 28% on online gaming, racecourses, and casinos. The Group has also finalized the method of taxation for these services. Sources said the initial betting and gaming amount will be taxed. That is, gross gaming revenue or GGR equal to sales or revenue, not income, will be taxed.
The group is said to have suggested that casinos should be brought under the 28% tax slab, while taxing only the amount paid at the time of purchase of betting equipment at the time of entry, not all betting transactions.
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“The Group of Ministers (GoM) on casinos, racecourses & online gaming has come to a consensus. The report of our submissions will be handed over to Hon’ble FM, Smti. Nirmala Sitharaman in a day or two & the matter will be presented in the next GST Council Meeting,” an official Twitter post read.
Earlier, before the commencement of GST extension to gaming platforms, the online gaming industry, which operates skill-based games such as e-sports, rummy, poker, chess, and fantasy games, has demanded that GST be reduced to 18 percent.
The demand has been backed by many groups claiming that the move to a higher tax bracket would derail the $ 2.2 billion industry, which has 400 players and employs about 45,000 people. However, at present, a group of ministers’ reports is expected to be handed over to the GST council in a few days.