The GST Council on Wednesday decided to impose 28 percent tax on online games, casinos and horse racing which however would be on the initial amount paid and not the whole value of each bet placed. A few states dissented to certain provisions in the law but the Council went ahead with the decision without a vote as majority of the states were in agreement, thereby confirming a CNBC-TV18 newsbreak.
The 51st GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, decided that it will make all efforts to amend the current law and bring the implementation into effect by October 1. It would also monitor the progress of the rule and possibly review the 28 percent rate, if necessary, after six months of implementation.
"It (28 percent GST on online gaming & casinos) is expected to be implemented from 1st October... It is also decided that this decision will be reviewed after six months after it is implemented. When I say six months it does not mean starting from today, it begins after when it is implemented..." Sitharaman said in a press briefing after the meeting.
She further said that the GST Council, in its previous meeting, had made a unanimous decision to impose a 28 percent GST on all betting, gaming-related activities, casinos, horse racing, and online games.
"It was decided that all of them will be taxed at 28 percent GST at face value." While some states favoured the immediate implementation of the 28 percent GST on the face value of online gaming, others requested a relook, expressing concerns over potential adverse impacts, she said.
Delhi's finance minister raised a request to review the 28 percent tax rate on online gaming. Responding to the appeal, Sitharaman acknowledged the concerns and assured an evaluation of the matter, FM added.
Additionally, she said that the representatives from Sikkim and Goa voiced their grievances, seeking reconsideration of the tax levy on casinos. Both states expressed apprehension about the potential impact of the new GST rate on their respective economies.
Tamil Nadu, where online gambling is banned, sought specific language in the amendments to acknowledge the state's unique situation. The Council also took into account the opinions of Maharashtra, Gujarat, Chattisgarh, West Bengal, Karnataka, and Himachal Pradesh, which advocated for implementing the proposed GST without delay. Some states even considered bringing in an ordinance to expedite the process.
However, the Council did not arrive at a unanimous decision on the matter, and certain states expressed the need for further examination. Delhi requested online gaming to be referred back to the Group of Ministers (GoM) for thorough evaluation.
Revenue Secretary Sanjay Malhotra said, If the review after six months of 28 percent GST on casinos, online gaming requires some change in the tax rate or anything, the government will be able to do it via a notification and will not need the law to be amended again.
Voting on any decision was not required at the GST Council meeting today as only a few states dissented, Malhotra added.
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