GST discussions on online games, casinos and racing issues
Category:UncategorizedGoods and Services Tax (GST) regime for casinos, racetracks and online games has broken the previous rule that all three categories, with or without games, will be taxed at a flat rate of 28%. Positions may be repeated. skills or opportunities.
However, GoM members disagree on whether to collect platform fees or the full amount paid by participants, so the final decision on the evaluation mechanism will be made by his GST Council.
The panel will meet on Tuesday (22nd November) and is likely to return to his first report to the GST Council in June. This marks an increase in tax rates for online games, as the online gaming platform currently only pays his 18% GST on platform fees instead of the full amount including winnings.
The online gaming industry has grown exponentially during the COVID-19 pandemic. According to a recent study by EY and Assocham, online gaming now contributes to his GST of over Rs 220 crore. According to a KPMG report, the online gaming industry is projected to grow from 136 billion rupees in 2020-21 to 290 billion rupees in 2024-25.
What did GoM discuss?
Most GoM states are known to support a tax rate of 28%, but have different evaluation mechanisms. West Bengal and Uttar Pradesh are in favor of a net worth tax, while Goa is proposing a tax at the entrance to casinos.
Comments from all countries will be incorporated into the final report to be submitted to the next Board meeting. The GST Council has not met him since June. State Finance Ministers are scheduled to meet with Federal Finance Minister Nirmala Sitharaman on Friday for pre-budget discussions that may include GST-related issues.
What did GoM say before?
His eight-member ministerial committee, headed by Meghalaya Chief Minister Konrad Samma, had submitted a report to the council that was discussed at its meeting in June. GoM proposes a flat tax rate of 28% for casinos, racetracks and online games. However, it does not distinguish whether the activity is a game of skill, a game of chance, or both.
At two meetings in May this year, the government “broadly agreed that these activities should be taxed because of their nature and negative externalities” and carry “economic risks and addiction”. I agreed.
GoM was granted a 15-day extension after the 47th GST Commission meeting in June, mainly after concerns about casinos were raised by one state – Goa.
GOM observed that while casinos pay his GST of 28% on betting and gambling in full, the online gaming industry does not consider online games to be subject to litigation other than betting and gambling. Therefore, GoM believes that taxation should be uniform.
The discussion then focused on evaluation. These activities are to suggest whether a game’s gross earnings or net worth should be taxed, and the mechanisms for calculating GGR or net worth.
What are the evaluation hotspots?
Regarding the casino’s valuation, GoM suggested that he would impose a 28% excise tax on the total denomination of chips/coins that players purchased from the casino, and that he would impose a one-time goods tax on chip/coin purchases. impose a tax. value), GST is no longer taxed on the amount of bets made per round. This includes bets made using winnings from previous rounds.
Also, on entry services to the casino he imposes his GST of 28% and proposes to calculate/pay an entry fee which includes the price of one or more items, mainly food, beverages etc. I’m here.
For horse racing and gambling, the GoM has concluded that 28% GST will be charged on the face value of the wager.