Union Finance Minister Nirmala Sitharaman, on Wednesday, clarified that the 28 per cent tax on the full face value of bets in online gaming, casinos and horse racing will stay even as a few states had sought a review of the tax.
The minister, who addressed the press after the GST Council meeting, said the 28 per cent tax will come into effect from October 1, and added that the government will review the same after six months.
Sitharaman said Delhi, Goa, and Sikkim had sought a review of the tax system. The minister said while Delhi finance minister opposed the levy of the tax, Goa and Sikkim wanted the levy on GGR (gross gaming revenue) and not on face value. However, other states wanted the decision to be implemented, she added.
The council, chaired by Sitharaman and comprising state ministers, in its last meeting on July 11 approved levying 28 per cent tax, a move that the All India Gaming Federation (AIGF), which represents companies like Nazara, GamesKraft, Zupee and Winzo, had termed as "unconstitutional, irrational, and egregious".
"The council recommended that valuation of supply on online gaming and actionable claims in casinos may be done based on the amount paid or payable or payable to or deposited with the supplier by/or on behalf of the player, excluding the amount entered into the games, bets out of winnings of previous games and not on the total value of each bet placed," the finance minister said.
The law committee, comprising Centre and state tax officers, had prepared draft rules for consideration of the GST Council with regard to the computation of supply value for tax purposes. The committee suggested the insertion of a new rule under which the value of supply of online gaming would be the total amount deposited with the online gaming platforms by way of money or virtual digital assets on behalf of the player.
