State Flag GST on gaming firm

State Flag GST on gaming firm

Subject : Economy

Section: Fiscal Policy

Context: GST Council affirms 28% tax on online betting from October 1

More about the news:

• During the 52nd GST Council meeting, various decisions were made, including the reduction of GST rates on certain products and clarifications on tax treatment.
• The council defended the 28% levy on online gaming despite some states terming it retrospective taxation.
• The taxation rights on extra neutral alcohol were transferred to states, and a prospective plan for a GST surcharge after March 2026 was discussed.
• Clarifications were provided on corporate guarantees and appeals, and age-related norms for GST Appellate Tribunal members were adjusted. The Council gave its nod to cap the maximum age of the GST Appellate Tribunal (GSTAT) president and members at 70 years and 67 years respectively. The minimum age for appointment would be 50 years. Also, an advocate with up to 10 years of substantial experience in litigation under indirect tax laws would be eligible for judicial membership in the tribunal.

What is Goods and Services Tax (GST):

• GST is an indirect tax that came into effect from 1 July 2017 through the implementation of the 101st Amendment to the Constitution of India by the Indian government.
• It has actually replaced various indirect taxes such as – service taxes, VAT, excise and others in the country.
• GST rates are divided into five different tax slabs for collection of tax – 0%, 5%, 12%, 18% and 28%.
• There are three types of GST i.e State Goods and Services Tax (SGST), Central Goods and Services Tax (CGST) and the Integrated Goods and Services Tax (IGST)

What is the GST Council:

• GST Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
• It makes recommendations to the Union and State Government on issues related to Goods and Service Tax and was introduced by the Constitution (One Hundred and First Amendment) Act, 2016.
• 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: –
  • Union Finance Minister – Chairperson
  • The Union Minister of State, in-charge of Revenue of 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.
• Every decision of the Goods and Services Tax Council shall be taken at a meeting by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:
  • The vote of the Central Government shall have a weightage of one third of the total votes cast, and
  • The votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.

Some facts about gambling in India:

• The Gambling Act, also known as The Public Gambling Act of 1867, is the law governing gambling in India.
•  Gambling is regulated by individual states, and they are responsible for crafting laws pertaining to gambling within their jurisdictions.
•  Goa and Sikkim are exceptions, as they have legalized and regulated gambling and betting within their states, with Goa also permitting casinos.
• Some states, such as Sikkim, Meghalaya, and Nagaland, have enacted specific laws to regulate online gaming.
•  However, only Nagaland and Meghalaya have separate regulations for “games of skill.“
• Fantasy league betting, such as fantasy football and cricket, has generally remained unregulated across India, although Andhra Pradesh, Telangana, Odisha, and Assam have imposed bans on it.
• Additionally, Telangana and Karnataka have banned all forms of online gaming and gambling, and similar laws were passed in Kerala, Andhra Pradesh, and Tamil Nadu. However, the laws in Kerala and Tamil Nadu were challenged and subsequently overturned in court, exempting games of skill.