GST Council to meet next week on e-Gaming levy

The Goods and Services Tax (GST) Council will meet virtually on August 2 to consider legal amendments necessary for the 28% levy on online gaming, casinos and horse racing.

The Centre is likely to introduce a GST amendment bill in the ongoing monsoon session of Parliament after the council's deliberations.

The GST Council, the apex decision-making body for the indirect tax, had on July 11 decided to impose the maximum 28% slab on the full face value in online gaming, casinos and horse racing. It also decided against differentiating between online games of skill and games of chance. Currently, games of skill attract 18% GST on gross gaming revenue, while 28% GST is levied on the total bet value in games of chance.

The special meeting is expected to thrash out issues such as repetitive taxation in determining the full face value among other matters flagged by the gaming industry.

The online gaming industry, including domestic companies and some foreign investors, have called on the Prime Minister's Office to review the tax. They say it will discourage investments in the sector.

Officials, however, ruled out any rethink and said the meeting had been called to firm up technical details and legal changes.

"The council will deliberate upon the changes to the GST law to implement the decision taken at its last meeting," a government official told ET.

Another official said there was a need to provide clarity on what comprises full face value if players use their winning money to play another game. "There are concerns as to (whether) it will lead to repetitive taxation...The law has to be clear and unambiguous," the official said, adding that the draft amendment is almost ready, and the fitment and the law committees are working on the fine print.

In an interview with the ET earlier this month, revenue secretary Sanjay Malhotra said that apart from taxation, there was a moral imperative to the GST Council's decision to impose 28% GST on online gaming.