No consensus on valuation of online gaming

The proposed move to hike the Goods and Services Tax on online gaming may be delayed due to a disagreement on the valuation mechanism among the group of state finance ministers.

A special ministerial group of seven states had been tasked with deliberating the taxation of online gaming.

The panel has decided to impose 28 per cent GST on online gaming. There was no consensus on the valuation mechanism.

The final stage of the report on online gaming is in the final stages. It should be submitted to the council soon. A state finance ministry official said if not, we will ask for an extension and make a final decision after further deliberation.

There was an agreement on the 28 per cent levy, but not on the mechanism valuation, according to sources.

The report is expected to have both majority and minority views, and if the government goes ahead with the majority view, the tax will be levied on the entire face value or bet amount and not the net amount after deducting the prize money.

In the case of casinos it was decided that the levy should be on the amount paid at the entry point, that is, while purchasing chips, but not on every betting transaction.

In the case of horse racing, the existing practice of levying 28 per cent GST on the entire bet amount is proposed to be continued.

The state finance ministers group is headed by Conrad Sangma, Chief Minister of Meghalaya. Finance ministers from Goa, Uttar Pradesh, Gujarat, Tamil Nadu, Maharashtra and officers from Telangana attended the meeting.

The 48th GST Council, which is going to be held virtually, may also examine the decriminalization of the GST law, a report of which has already been submitted. The GST Act can be removed from the government's hands under decriminalisation.