Panel yet to submit report on taxation of online gaming

A panel of Indian state finance ministers has yet to submit a report on taxation of the booming online gaming sector that is critical to a final decision on how the levies should be imposed, a senior government official said on Monday.

The panel has been deliberating how to tax online gaming companies, and whether a federal tax should be imposed on only the profits of firms or the value of the entire pool of money collected from participants.

The panel is unlikely to reach a consensus this month, the official told reporters in New Delhi.

Foreign investors like Tiger Global and Sequoia Capital are backing local gaming companies Dream 11 and Mobile Premier League, popular for their fantasy cricket games, as they have become hugely popular in India.

The report will be finalized on December 17 and there will be a decision on whether or not it will be finalized, the official said.

India is also working on federal regulations for the gaming sector, which research firm Redseeer estimates will be worth $7 billion by 2026, dominated by real-money games.

The prime minister's office overruled a proposal to regulate games of skill and leave out games of chance, and will apply to all real-money games, according to the planned regulations.

The GST council's panel will discuss decriminalizing the tax laws by raising the threshold for prosecution during the December 17 meeting of the GST council, the official said.

A separate government panel tasked with the rationalisation of GST rates is discussing the 18% tax levied on health insurance, amid calls for a lower rate, said the official.