*GST: Consensus eludes GoM on online gaming, casino & horse racing – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/economy/consensus-eludes-gom-on-online-gaming-casino-horse-racing/article65631887.ece

Group of Ministers aims to submit final report before Aug 10

A Group of Ministers (GoM) on online gaming, casinos and horse-racing, in its meeting on Tuesday remained inconclusive. It will meet one more time before giving its report next month.

Meanwhile, representatives from these sectors made their presentations before the GoM and answered queries raised by members. They are hopeful of getting positive recommendations from the GoM which will then be considered by GST Council, in its next meet in August to be held at Madurai.

“No date has been fixed for the next meeting (of GoM) . Report has to be submitted by August 10,” a member of GoM told BusinessLine. Last month, the GST Council had asked the GoM to re-deliberate the tax issue and come back to the council. This cropped up as Goa wanted different treatment for casinos. However, the Council allowed all the three segments to present their views before GoM.

A statement issued by Turf Authorities of India said an online representation was made by race horse owner and senior Supreme Court advocate Aryama Sundaram and leading stud farm breeder Ameeta Mehra of Usha Stud. “We are grateful to have been given the opportunity to speak, and hope that the age long prestigious sport of horse-racing and breeding will be given its due status as a sport of skill,” it said. A team of Turf Authorities of India was represented by Zavaray Poonawala, Harimohan Naidu, Ramesh Rangarajan, apart from Mehra.

In its earlier report presented before the Council, the GoM — headed by Meghalaya Chief Minister Conrad Sangma — recommended a uniform 28 per cent GST rate on horse racing, online gaming and casinos. The panel also recommended the base on which this rate should apply. As on date, online gaming has a dual rate of taxation — 18 per cent on games of skill (not involving betting or gambling) and 28 per cent on games of chance (involving betting and gambling).

Most online gaming apps pay GST at the rate of 18 per cent. Both casinos and horse-racing attract 28 per cent GST. However, the issue here is more about the value for calculation of GST.

Expert take

Prateek Bansal, Associate Partner with law firm White and Brief, said while the issue as to whether a particular game is one of skill or chance would persist under the Indian Public Gambling Act so as to determine its legality, equal treatment from the GST perspective would reduce misdeclarations/misleading activities by the businesses to claim the lower GST rate, thereby avoiding unwarranted litigation.

At present, online gaming firms are paying 18 per cent GST on the basis that these are games of skill rather than betting or gambling. With the increase of rate to 28 per cent it would be interesting to see whether it will apply only prospectively or retrospectively as well. Any attempt by the revenue department to recover the differential GST for the past period would most likely result in litigation as the entities would not be able to now recover the said incremental tax amount from their customers,” he said.

Published on July 12, 2022

COMMENTS

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s