The committee of state finance ministers is likely to recommend a GST of 28 per cent on online gaming, regardless of whether it is a game of skill or chance, and may leave the final decision on the pesky issue of assessment to the GST board, the sources said.
The group of ministers, chaired by Meghalaya Chief Minister Konrad Sangma, held a virtual meeting on Tuesday to finalize their long pending report on taxes on online gaming, casinos and horse racing.
According to the sources, the majority of state ministers in the Moroccan government are of the opinion that the Goods and Services Tax (GST) on online games should be raised to 28 percent. However, in the absence of consensus as to whether the fee charged by the portal only or the entire consideration, including the bet amount received from participants, should be taxed, the Moroccan government has decided to refer all proposals to the GST Council for a final session. resolution.
Currently, online gaming attracts 18 percent GST. Taxed on the total gaming revenue, it is the fee charged by online gaming portals.
The sources said there will be no further deliberations at the Montenegrin government level and the report will now be submitted to the GST Board for consideration. The GST Council, which is chaired by the Union Finance Minister and includes its state counterparts, is the supreme decision-making body in GST related matters.
GoM in its previous report submitted to the council in June proposed a 28 percent GST rate on the full value of considerations, including the entry fee for a contest, paid by the player, without distinction as games of skill or chance. However, the council asked the Moroccan government to reconsider its report.
After that, GoM took the views of the attorney general and also met with stakeholders from the online gaming industry.
Despite GoM deliberating over two separate definitions of “games of skill” and “games of chance,” it finally decided to tax defective goods that attract a GST of 28 per cent.
The message should be clear that online gaming is a negative feature. However, some mitigation could be provided in the evaluation methods, the sources told PTI.
A GoM report in June suggested that GST should be charged on the entire amount received as of the participant.
Industry experts said imposing a GST of 28 percent on the full amount, which a player deposits for a game for both categories of online games, would reduce the prize money left for distribution and keep players away from legitimate tax rebate portals. This may also encourage online players to use illegal portals that do not deduct taxes.
Online gaming has seen a boom during the time of the Covid lockdown, with the number of users in India It rises dramatically. According to a KPMG report, the online gaming segment will grow to Rs 29,000 crore by 2024-25 from Rs 13,600 crore in 2021.
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