The appellate body deciding the tax policies under the indirect taxes in the country, the Goods & Services Tax (GST) Council may reportedly meet in October instead of September, as the group of ministers (GoM) on casinos, race courses & online gaming, as well as the panel on the GST Appellate Tribunal (GSTAT), are yet to submit their reports.
With no unanimity about taxing at the rate of 28% on the full value of the consideration, without making a distinction between games of skill or chance, the GoM led by Meghalaya chief minister Conrad Sangma has sought legal opinion on whether or not the prize money in online gaming and horse racing is covered within “actionable claim”.
Earlier, the meeting was scheduled on September. However, the GoM has not submitted their report yet and therefore, the meeting would probably happen on October. The report will be submitted after another meeting of the GoM to include a legal view on the matter later this month, sources said.
In the last GoM meeting on September 5, West Bengal and Uttar Pradesh had supported goods and services tax (GST) on online gaming, horse racing and casinos at a uniform rate of 28% on the full value of the consideration, without making a distinction between games of skill or chance.
The GoM, in its first report, has recommended that in the case of online gaming, the activities should be taxed at 28% on the full value of the consideration, by whatever name such consideration may be called, including contest entry fee, paid by the player for participation in such games. Since GST is levied on online skill-based gaming at 18% currently on the platform fee (about 20% of the contest entry fee), the tax incidence on the gaming industry will rise.
In the case of racecourses, the GoM had earlier said that GST should continue to be levied at the rate of 28% on the full value of bets pooled in the totalisator and placed with the bookmakers. In the case of casinos, GST was to be applied at the rate of 28% on the full face value of the chips/coins purchased from the casino by a player. In the case of casinos, once GST is levied on the purchase of chips/coins (on face value), no further GST was to apply to the value of bets placed in each round of betting, including those played with winnings of previous rounds, the GoM had said in its first report.
On August 18, the GoM on tribunals convened by Haryana deputy chief minister Dushyant Chautala finalised that the GST Appellate Tribunal (GSTAT) be set up with a principal bench in New Delhi and similar benches at various other locations. However, it is yet to submit the report to the council.
According to sources, each of these regional benches will consist of a judicial officer equivalent to a high court judge and a senior tax officer, from either the Centre or the state, as a technical member. A state can host a maximum of five benches and the state governments would be given certain relaxation on the nomination of technical members.
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