Priya Aditi
GST Council meet: FM Nirmala Sitharaman stated after the 51st GST Council meeting that the decision to impose a 28% tax on the entire face value of wagers placed on online gaming would be implemented on October 1. After six months, the GST Council will review the implementation of the 28% GST on online gambling and casinos.
Nirmala Sitharaman stated that Delhi’s finance minister opposed the imposition of a tax on online gambling, whereas Goa and Sikkim favoured basing the tax on GGR (gross gaming revenue) rather than face value.
Sitharaman stated that other states, including Karnataka, Gujarat, Maharashtra, and Uttar Pradesh, desired the implementation of the decision made at the previous meeting. She stated that the new levy would likely go into effect on October 1 following the necessary modifications to the federal and state laws.
After the 51st GST Council meeting, Union Finance Minister Nirmala Sitaraman stated, “…The council recommended that valuation of supply on online gaming & actionable claims in casinos may be done based on the amount paid or payable or payable to or deposited with the supplier by/or on behalf of the player, excluding the amount entered into the games, bets out of winnings from previous games, and not on the total value of each bet placed…”
She stated, following the panel meeting, that the GST Council — the highest decision-making authority of the new indirect tax regime, comprised of the Union finance minister and representatives of all states — discussed the language of amendments required to tax online gaming.
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In a statement, FIFS and EGF, which represent fifty Indian online gaming companies, said, “The new tax framework, while clarifying and resolving uncertainty, will result in a very burdensome 350% increase in GST and set the Indian online gaming industry back several years.” However, it will provide gaming companies with a fighting opportunity to innovate and rebuild the gaming industry’s foundation in India.”
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