NEW DELHI: The GST Council will meet on August 2 to reconsider its decision of imposing 28% tax on online gaming, horse racing and casinos, as per government sources. The sources said the Council may give some concession to these sectors in terms of not charging 28% on full face value of a gaming transaction.
However, the decision will depend upon consensus among the Council members.“Many trade bodies had made representations before the government to give them some concessions. They have been building pressure on Centre to roll back the decision or give them some concession,” a government source said. He stated that Sikkim and Goa had also written applications to the Centre to give them some relaxations on 28% levy on online gaming and casinos, as their revenues will get adversely impacted.
Meanwhile, the Council will discuss procedural issues and changes in GST law to bring online gaming and horse racing as taxable actionable claims. After the 50th GST Council meeting, Finance Minister Nirmala Sitharaman had said effective date for 28% GST levy on online gaming will be announced after amendments to the GST law. She had said the decision of levying 28% wasn’t meant to destroy the industry but was made on the ground of ‘moral question’ that these can’t be treated at par with the essential commodities.
Online gaming industry representatives had met Prime Minister Narendra Modi recently to voice their concerns about the decision, which will bring it to its knees. “Problem doesn’t lie in 28% uniform levy of GST - the companies will bear it. It is the change in value from platform fee or commission to full value of every game, which seems unfair.
Levying GST on every game means taxing online gaming industry worse than even casinos where GST is being levied on deposits. The implication of levying tax on every game/ on winnings effectively bumps up cost/ taxes which may likely increase effectively to 50-70%,” said Deepali Pant Joshi, former executive director with the RBI.