In a move expected to impact the nascent online gaming industry in India, a group of finance ministers of states at a meeting today proposed raising the Goods and Services Tax (GST) by 10 per cent to the highest slab rate of 28 Go Percent.
Government sources said that the proposal, once formally approved by the Federal GST Council headed by Finance Minister Nirmala Sitharaman, will bring GST on online gaming in India at par with betting or gambling, which already attracts 28 per cent GST.
Sources said there was a consensus on the 28 per cent levy but there is no consensus yet on the valuation mechanism. However, the report to be presented shall contain majority and minority views. If the government proceeds with a majority; So the tax will be on the full face value or bet amount and not on the net amount after deducting the prize money.
In the case of casinos it was decided that the levy should be on the amount paid at the entry point – ie when buying chips, but not on every betting transaction.
In the case of horse racing, it is proposed to continue with the existing practice of levying 28 per cent GST on the entire stake amount.
The group of state finance ministers is headed by Meghalaya Chief Minister Conrad Sangma. Finance ministers from Goa, Uttar Pradesh, Gujarat, Tamil Nadu and Maharashtra and officials from Telangana participated in the meeting.
