Jobaaj Stories
The Goods and Services Tax (GST) Council is set to hold an unscheduled meeting on August 2 to address concerns and provide clarity on the legal amendments and tax treatment related to the recent decision to impose a 28 percent tax on the face value of real-money games. Government officials have disclosed this information, stating that the virtual meeting comes less than a month after the 50th GST Council meeting held on July 11.
The forthcoming meeting is expected to discuss the mechanism for levying a 28% GST on online gaming, horse racing, and casinos. The decision to tax these activities at the full face value has drawn criticism from the online gaming industry, which fears its growth prospects in the country may be negatively impacted.
The proposed amendments aim to include 'online gaming' in Schedule 3, Entry 6 of the GST law, treating it on par with betting, lottery, and gambling, all of which are subject to GST levy.
The government is eager to introduce these amendments during the ongoing Monsoon session of Parliament, which concludes on August 11.
The Group of Ministers has already recommended that, due to the lack of consensus on whether the tax should apply to the full face value of bets or the Gross Gaming Revenue (GGR), the GST Council should make the final decision. During their deliberations, the council suggested that the tax should be applicable on the face value of chips purchased in casinos, the full value of bets placed in horse racing, and online gaming.
In response to the proposed tax, the online gaming industry has expressed concerns about its potential impact, warning that it could lead companies to move their operations abroad. Investors have also written to Prime Minister Narendra Modi, expressing their apprehension that the change in the application of GST rates could lead to significant damage to the sector.
The Ministry of Electronics and Information Technology (MeitY) is likely to raise the issue with the GST Council and request a possible review of the decision.
— Harshita Kumar
