Ministerial group to recommend 28% GST on casinos, race courses, online gaming

Sangma said in a social media post on Wednesday that a consensus has been reached in the Group of Ministers. The submission report of the GoM will be submitted to Finance Minister Nirmala Sitharaman in a day or two and the matter will be presented in the next. GST In the council meeting, Sangma said in the post without mentioning the tax rate that the committee would propose. Giving details about the discussions in the GoM, a person said that there was a consensus for 28% GST rate on these items. The report will specify the basis on which the rate of tax will be applicable.

Currently, casinos, racecourses and online gaming firms are paying 18% GST, supported by a court order in the absence of clarity on the subject. Businesses claim that these are games of skill rather than betting or gambling.

Earlier this month, Sangma told Mint that the online gaming industry is touching almost 30,000 crore annually. “It is seeing a growth of 20-30% every year. So we need to take the right decision,” he said then.

However, experts expressed concern over the proposed highest slab on these activities.

L Badri Narayanan, executive partner of Lakshmikumaran and Sreedharan Attorneys, said, “Equalizing the game of skill and chance and taxing both the games at 28% would be detrimental to the nascent Indian online gaming sector.” Experts are awaiting the details of the assessment on which the rate of tax will be applicable.

“It is important for the GST Council to adopt a proper GST rate and assessment mechanism. The well-established legal jurisprudence of the Supreme Court treating the game of skill as distinct from the game of chance should be taken into account by the Council before determining the GST rates and valuation mechanism,” Narayanan said in an email to the GST Council on Wednesday. At the time of publication, which sought comments for the story remained unanswered.