Goods and Services Tax (GST): The Group of Ministers (GoM) on Casinos, Online Gambling and Horse Racing, which has been asked to consider the issue of levying a 28% GST on these activities, met on Tuesday and the meeting remained inconclusive, a source told CNBC-TV18. . The panel had until July 15 to consider the matter and submit its new report.
The GoM, led by Chief Minister of GST Council Meghalaya, Conrad Sangma, discussed the assessment mechanism and expressed the view that GST should be levied on gross gaming revenue in line with international best practice , and not on the global pool as previously recommended, the source said. .
The source also said GoM members all agreed to levy 28% GST on the three activities – online gambling, casinos and racetracks. The group has not yet made a decision on which component will be taxed.
The group of ministers could meet again before August 10 to finalize the recommendations and submit its report.
The GoM had previously recommended that online games be taxed at the full value of the consideration, including the contest entry fee paid by the player when participating in the game. In the case of racetracks, the GoM recommended that GST be levied on the total value of bets aggregated in totalisers and placed with bookmakers.
After the meeting of the 47th GST Council at the end of June, Union Finance Minister Nirmala Sitharaman said that the Council was of the prima facie view that the common thread linking them is that these activities are in the nature of “gambling” and should be taxed accordingly.
She added that the Chief Minister of Goa is of the view that the casino should be treated differently from other businesses – horse racing, online gambling and lottery. The finance minister also said the GoM has until July 15 to study and submit a new report. The Council will meet the first week of August exclusively to discuss the new GoM report and a final decision will be made.
The GoM had recommended that no distinction be made on the basis of game of skill or game of chance for the purpose of levying GST. The panel added that the GST rate on all of these activities should be 28%.
Regarding the valuation, the GoM had previously stated that in the case of online games, it should be the full value of the consideration, including the contest entry fee, paid by the player for their participation. He added that in the case of racetracks, it should be the total value of bets aggregated in the totaliser and placed with the bookmakers. He also said that for casino valuation, it should be the total face value of chips/coins purchased from the casino by a player.
The GoM also stated that once GST is levied on the purchase of tokens/coins (on face value), no further GST should apply to the value of bets placed in each betting round, including those played with winnings from previous rounds. Entrance fees to casinos, including the price of one or more other supplies such as food, drink, etc., will be 28%.
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