The proposed move to hike the Goods and Services Tax (GST) on online gaming may be delayed due to a disagreement on the valuation mechanism among the group of state finance ministers.
A special ministerial group comprised of officials from seven states had been tasked with deliberating the taxation of online gaming.
This panel met recently and decided to impose 28 per cent GST on online gaming. However, no consensus was achieved on the valuation mechanism.
“The report on online gaming is in the final stages. It should be submitted soon to the council. If not, we will ask for an extension and take a final decision after further deliberation,” said a state finance ministry official.
According to sources, there was agreement on the 28 per cent levy, but not on the mechanism valuation.
The report is expected to have both majority and minority views and if the government goes ahead with the majority view, the tax will be levied on the entire face value or bet amount and not on the net amount after deducting the prize money.
In the case of casinos, it was decided that the levy should be on the amount paid at the entry point, that is while purchasing chips, but not on every betting transaction.
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In the case of horse racing, the existing practice of levying 28 per cent GST on the entire bet amount is proposed to be continued.
The state finance ministers group is headed by Conrad Sangma, the Chief Minister of Meghalaya. The meeting was attended by the finance ministers from Goa, Uttar Pradesh, Gujarat, Tamil Nadu, Maharashtra, and officers from Telangana.
The 48th GST Council, which is going to be held virtually, may also discuss the decriminalisation of the GST law, a report of which has already been submitted. Under decriminalisation, the government may remove penal offenses from the GST Act.
