- A final report on the same is now ready, which will be taken up in the upcoming GST Council meeting
- In an earlier meeting, it was decided on hiking the tax rate on these services to 28%
- The final report will soon be handed over to Finance Minister Nirmala Sitharaman
The panel of ministers tasked to review the GST levy on casinos, racecourses and online gaming has finalised its report, which will be taken up in the upcoming GST Council meeting.
The Group of Ministers, chaired by Meghalaya Chief Minister Conrad Sangma, had in its previous meeting earlier this month unanimously decided on hiking the tax rate on these services to 28 per cent.
The GoM met again on Wednesday and finalised the method of valuing these services for the purpose of levying this tax.
"The Group of Ministers (GoM) on casinos, racecourses & online gaming has come to a consensus. The report of our submissions will be handed over to Hon'ble FM, Smti. @nsitharaman Ji in a day or two & the matter will be presented in the next @GST_Council Meeting," Sangma tweeted.
At present, services of casinos, horse racing and online gaming attract 18 per cent GST.
The government had in May last year set up a panel of state ministers for better valuation of services of casinos, online gaming portal and racecourses for levying Goods and Services Tax (GST).
The report of the GoM is likely to be taken up in the next meeting of the GST Council expected later this month.
Other state ministers in the eight-member GoM include Maharashtra deputy chief minister Ajit Pawar, Gujarat finance minister Kanubhai Patel, Goa panchayati raj minister Mauvin Godinho, Tamil Nadu finance minister P Thiaga Rajan, Uttar Pradesh finance minister Suresh Khanna and Telangana finance minister T Harish Rao.
Meanwhile, the industry has raised concerns over the likely increase in tax rate.
"The proposal to keep games of skill and chance on par, will be massively detrimental to the Indian Gaming Industry, which is expected to grow to the size of $5 Bn by 2026. Levy of tax at 28% will cause major cash flow disruptions across the industry," Rishabh Bhansali, Co-Founder, FanClash, said. "Further, the proposed valuation rules to tax the entire entry fee, instead of the platform fee earned by Skill game operators, will impact their business viability. This will in turn affect the gamers, the industry and its employees, and eventually the taxman, who will, in the long term see large dips in tax revenue," Bhansali added.
"The betting and gambling tax legislation will have little impact on e-sports because the game makers have tight rules prohibiting not only any such practices for the event, but also having any gambling or betting organisation from sponsoring any competitive e-sports tournament," Yash Pariani Founder and CEO House of Gaming, said, adding," the Electronic Sports Sector is much bigger than any Casinos, Racing and betting industry. That is by no means a current thing, but nothing to stop the electronic sector from accelerating."