Akash Jha
On July 11, Finance Minister Nirmala Sitharaman announced that the Group of Ministers (GoM) has resolved to impose a 28 percent GST on the complete value of online gambling, horse racing, and casinos, without distinguishing between games of skill and chance.
FM Sitharaman announced that the GST Council had decided to impose a 28% tax at the point of entry on the full face value of bets placed on online gaming, casinos, and horse racing.
According to FM Sitharaman, the GST law would be amended to clarify that the aforementioned services do not give rise to actionable claims, such as those in the lottery and the betting industries.
The GST Council’s talks on internet gambling earlier today were deep. The Council will maintain communication with the government’s IT department. The FM continued, “We will conform to whatever regulation the Ministry promulgates.”
Sitharaman underlined that the 28 percent GST levy on online gambling would be implemented following modifications to GST law.
The minister of forests, cultures, and fisheries in Maharashtra, Sudhir Mungantiwar, recently announced that the state council has resolved to eliminate the distinction between games of skill and games of chance when it comes to iGaming.
Whether a game of skill or chance, all online betting and gambling are currently subject to a GST of 28 percent. The percentage of GGR levied on all other games is 18 percent.
‘Not targeting any industry,’ says Sitharaman
The GST Council does not wish to harm the internet gambling industry or states that currently host casinos. There were a few worried states. But the ethical challenge is whether we should prioritize them over necessities. I am pleased to report that the GST Council has reached a conclusion after two or three years of deliberation. Finance Minister Sitharaman characterized the situation as “very complex.”
GST appellate tribunals to be set up
Appeals boards for the GST will be established gradually. According to FM Sitharaman, GST appellate tribunals will first be established primarily in state capital cities and where high court benches are located.
Revenue Secretary Sanjay Malhotra has stated that the GST Appellate Tribunal should begin hearing cases this fiscal year.
Items exempted from GST rates
The GST Council also agreed to remove pharmaceuticals used to treat cancer and uncommon disorders from the charge, the FM said.
The import of the cancer medicine Dinutuximab and FSMPs used to treat uncommon disorders were both exempted from GST by the Council.
The FM also noted that private satellite launch services are no longer subject to GST.
Rates on fish soluble paste, LD slag from 18% to 5%
Sitharaman announced a cut in tariffs from 18% to 5% on four products, including fish soluble paste and LD slag.
Tax on food and beverages in cinemas will be 5%
Revenue Secretary Sanjay Malhotra confirmed the GST Council’s decision to set the GST rate on food and beverages sold in theaters at 5%.
22% cess on MUVs but sedans are not included
The current GST cess of 20% has been raised to 22% for MUVs that match the standards for length and engine size. The levy on corporations will rise by 2%.
Follow our GST Council Meeting Live blog for more updates
Rs 17,000 crore tax evasion found in drive against fake input tax credit
A total of Rs 17,000 crore in tax fraud was discovered in the taxation department’s drive against false input tax credit, the Revenue Secretary said.
GST on casinos, horse racing, online gaming: Industry experts unhappy
IThe GST Council’s decision to impose a 28 percent GST on online gambling and horse racing was met with widespread disapproval from industry professionals.
The Indian players will be severely hampered by a 28% tax rate being imposed on the gambling business. If special cases are made, we need to see the notice language in its entirety. With this new round of litigation, it’s possible that letters for differential tax may be sent out to those involved in the gaming industry right away, as predicted by Ankur Gupta, Practice Leader (Indirect Tax), SW India.
“This is completely against the vision of the government to promote online gaming in India,” said Sudipta Bhattacharjee, Partner at Khaitan & Co. The Karnataka High Court’s conclusions in Gameskraft that skill games are separate from chance games are underappreciated. The constitutionality of the proposed approach to taxing online gambling remains to be seen. In any event, it’s too late to execute this change retroactively.
Decisions on GST rates, rules, and regulations are made by the GST Council, and any modifications to these policies require unanimous approval from the council’s members. The council’s recommendations may have far-reaching effects on Indian industries and consumers.
GoM convener and Meghalaya Chief Minister Conrad Sangma presented a report on the taxation of gambling establishments to Union Finance Minister Nirmala Sitharaman in December.
After delivering the report at the time, Sangma had indicated that the GoM had provided it with several points of view since they were unable to reach a consensus. He then emphasized that the GST Council would be making the ultimate decision.
West Bengal, Uttar Pradesh, Goa, Tamil Nadu, Telangana, Gujarat, and Maharashtra are the eight states represented in the Group of Ministers in the GST Council, which was convened by Meghalaya Chief Minister Conrad Sangma.
The Finance Minister’s Office, Nirmala Sitharaman, tweeted before the 50th meeting, “The 50th meeting is a milestone which indicates success of cooperative federalism and establishment of a good & simple tax regime.”
In the spirit of cooperative federalism, the council has held 49 meetings and made around 1,500 decisions prior to the 50th meet.
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