• Notification Date: 10-07-2023
• Notification No: N/A

Goa differs from GoM’s decision on 28% GST on Online Gaming, Casinos, Horse Racing

A Group of Ministers (GoM), formed to examine concerns related to the taxation of casinos, race-courses and online gaming, has reached a broad agreement that a 28 per cent GST shall be imposed on all three supplies. As per reports, a consensus could not be built on the taxability of online games, as Goa proposed an 18 per cent tax on platform fees. 

According to the report, in its upcoming meeting on July 11, the GST Council is expected to make a final decision on whether the tax should be levied on gross gaming revenue (GGR), or fees charged by the platform; or on the full-face value of bets put in by players of online gaming, horse racing and casinos. 

Moreover, the Council, chaired by the Union Finance Minister Nirmala Sitharaman and comprising state counterparts, needs to determine whether these three activities fall under the category of actionable claims of betting and gambling. 

The Group of Ministers, convened by Meghalaya Chief Minister Conrad Sangma, has members from eight states including West Bengal, Uttar Pradesh, Goa, Tamil Nadu, Telangana, Gujarat and Maharashtra. 

Among the eight states, while West Bengal and Uttar Pradesh were of the view that a 28 per cent GST should be levied on all three activities on full face value of the bets placed, Gujarat, on the other hand, was of the view that 28 per cent tax should be levied on platform fees. 

Meghalaya suggested that 28 per cent tax should be levied on GGR or platform fees or commission charged by casinos, online gaming and horse racing. It also suggested that a special mechanism to carve out an ‘Escrow Account’ for the purpose of pooling in prize money for payout to winners would make administration of the tax easier. 

Goa recommended a 28 per cent tax on the gross gaming revenue of casinos and an 18 per cent GST on platform fees or service charges levied by platform operators. It also suggested treating contributions to the prize pool as supplies not subject to GST. 

Tamil Nadu and Telangana have suggested that if the GST Council determines that the three activities are not actionable claims of betting and gambling, then a 28 per cent tax should be levied on GGR. 

Maharashtra, while suggesting a 28 per cent rate for all three supplies, argued that there should be no differentiation in taxation based on whether the activities involve skill or chance, and the valuation rules should reflect this. It proposed that a suitable abatement be provided for determining the taxable value of supply of the actionable claim. An actionable claim is typically referred to as a claim of debt. 

Amid differentiated views, the GoM has left it on the GST Council to decide on the final taxation rate as well as valuation.