GST Council-appointed GoM says the GST rate on casinos, race courses, online gaming and lottery should be 28 per cent
The GST Council, which is scheduled to meet next week in Chandigarh, is likely to discuss changes in law to facilitate provision for setting up GST Tribunals. The Council will also discuss the group of ministers’ (GoM) report on online gaming, casinos and race courses, sources told CNBC-TV18. The GoM met on June 17 and discussed issues like tax slabs and rates, among others.
The GoM, which was appointed by the GST Council last year to suggest ways for augmenting revenue by rationalising tax rates and correcting anomalies in the tax structure, has recommended that the imposition of GST on casinos, race courses, online gaming and lottery should be uniform both in rates and valuation norms, the sources told CNBC-TV18.
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It also recommended that no distinction should be made on grounds of game of skill or game of chance for the purpose of the levy of GST. The panel added that the rate of GST on all such activities should be 28 per cent, they said.
On the valuation, GoM said in the case of online gaming, it should be full value of consideration, including contest entry fee, paid by the player for participation; in the case of race courses, it should be full value of bets pooled in the totalisator and placed with bookmakers. It also said that for the valuation for casinos, it should be full face value of chips/ coins purchased from casino by a player, the sources said.
It added that once GST is levied on purchase of chips/coins (on face value), no further GST should apply to the value of bets placed in each round of betting including those played with winnings of previous rounds. Entry fee to casinos, including the price of one or more other supplies such as food, beverages, etc., will be at 28 per cent.
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Any other additional service/optional supplies made independently of the entry ticket shall be taxed at the rates as applicable on such supplies, the sources added.
During the 47th meeting, the GST Council, headed by Finance Minister Nirmala Sitharaman, is likely to discuss pruning the list of exempted items, plan to shift rate slabs, and proposal to correct inverted duty structure in textiles. It might discuss a proposal to shift rate slabs from the current five per cent to seven or eight per cent; and from 18 per cent to 20 per cent. The Council may also discuss the proposal to correct inverted duty structure in textiles.
An inverted duty structure refers to a situation where the tax rate on inputs purchased is higher than that on finished goods.
Currently, there are four GST slabs — 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The 18 per cent slab has 480 items, from which about 70 per cent of the GST collections come. Apart from this, there is an exempt list of items like unbranded and unpacked food items that do not attract the levy.
In a major ruling last month, the Supreme Court has said the GST Council is only a recommendatory body and its recommendations are not binding on the Centre or states. The court held that the recommendations of the GST Council will have a persuasive value. The Court also held that both Parliament and the state legislatures can equally legislate on the matters related to GST.
