Tax on Games! Government preparing to impose 28% GST on online gaming

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New Delhi. The proposal to impose 28 percent GST on the gross revenue of online gaming, casinos and horse racing is likely to be discussed in the meeting of the GST Council to be held this week. Sources said that the report submitted by the Group of Ministers (GoM) constituted under the chairmanship of Meghalaya Chief Minister Conrad Sangma can be considered in the meeting of the GST Council to be held in Chandigarh on June 28-29.

The GOM has recommended in its report that the entire value of online gaming should be taxed, including the entry fee paid by the player to participate in the game. On the other hand, in the case of horse racing, the GoM has suggested that GST should be levied on the entire amount deposited for placing bets.

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Regarding casinos, the GOM has stated that the full face value of chips/coins purchased by a player from the casino will be taxed. Along with this, the GoM has also recommended the imposition of 28 percent GST on the entry fee in casinos.

Currently, online gaming attracts GST at the rate of 18 per cent.
In May last year, the government had constituted a committee of ministers to evaluate GST on casinos, online gaming portals and horse racing. Presently, services of casino, horse racing and online gaming attract GST at the rate of 18 per cent.

Fear of generation of black money
AMRG & Associates Senior Partner Rajat Mohan said the imposition of 28 per cent tax on online gaming, horse racing and casinos will equate these services with pan masala, tobacco and liquor, which are considered bad. He said that taxing gross revenue instead of net value addition on online gaming, horse racing and casinos would not be in line with the global tax regime. He said that this may increase revenue for some time but there is a possibility of generating black money on a large scale in the long term as it will give a boost to the unorganized sector for tax evasion.

Tags:, GST council meeting

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