GST Council for 28% on full face value of casino, online game, horse race bets

GST Council for 28% on full face value of casino, online game, horse race bets

Subject :Economy

Section: Fiscal Policy

In News: GST Council in its 50th meeting has recommended 28 per cent rate at full face value for online gaming, casinos and horse racing.

Key Points:

• The GST rate of 28 per cent at full face value for online gaming, casinos and horse racing has been recommended by the GST council.
• The GST council had discussion on whether to impose a 28% GST on the face value of bets, gross gaming revenue, or just on platform fees and the council settled on taxing the turnover. Finally total turnover will be used as a base for taxation.
• It was further clarified that a 28 per cent rate will be applicable each time one is buying chips or placing bets.
• Further no differentiation has been made between games of skill or chance. Tax on e-gaming would be imposed without making any differentiation based on if the games require skill or based on chance.
• The decision to tax at 28 per cent was driven by the moral point of view of how gambling can be treated at the same rate as essential goods and services.
• Amendment will be made in the law to include online gaming and horse racing in Schedule III as taxable actionable claims.  A Bill to implement the decision is expected during the forthcoming Monsoon Session.
• It was also noted that the definition of online gaming will be in sync with the definition in the legislation being proposed by the IT Ministry.
• Gaming industry has put forward the view that gamblers and e-gamers or games of skill should not be treated the same. The move is likely to slow the growth and innovation in the gaming industry.

Other key decisions:

• The Council also decided to exempt import of cancer drugs and food for special needs from GST
• Food and beverages in cinema halls are taxed like restaurant service, whether as part of service or independently of cinema exhibition. Cinema ticket and food and beverage supply clubbed together, to be taxed at 18%
• The Financial Intelligence Unit (FIU) can share information with the GST Network (GSTN) under the Prevention of Money Laundering Act (PMLA). This was required under FATF (Financial Action Tax Force) mechanism and it will empower tax officials

GST  Council

Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.

• As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
• As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: –
  • the Union Finance Minister-Chairperson;
  • the Union Minister of State in charge of Revenue or Finance …Member
  • the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government. Members.
• As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.