GST Council to meet on August 2 to discuss rules, amendments for online gaming tax

The Goods and Services Tax (GST) Council is likely to meet on August 2 to discuss the rules related to implementation of 28% GST on horse racing, online gaming and casinos.  

According to sources, the Council is not likely to rethink the decision to impose 28% GST on the full value of those activities. “The discussions will be around procedural issues and amendments in the GST law that have to be approved by the GST Council,” the source said, adding that there will be no roll back of the decision.  

The GST Council had unanimously decided to impose 28% GST on online gaming, horse racing and casinos on the full face value in its meeting on July 11. To bring this into effect, section 3 of the GST Act needs to be amended to bring online gaming and horse racing as taxable actionable claims. The government is keen on introducing the amendments in the ongoing Monsoon session of Parliament that is on till August 11.  

There are also questions on whether the GST would be levied at the entry level or on each bet that is placed during a game. The gaming industry has said the tax impact could be very high if GST is imposed on every bet. The GST Council may also deliberation this issue, but it is not clear whether it is part of the agenda as of now.  

The online gaming industry has, however, aired concerns about the impact of the tax and has said it could force companies to move abroad. Investors have also written to Prime Minister Narendra Modi over the proposal stating that the change in methodology to apply GST rates on ‘full value’ will result in wholesale destruction of the sector. 

The Ministry of Electronics and Information Technology (MeitY) may also take up the issue with the GST Council and ask for a possible review.   

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