Council unlikely to review 28% GST on online gaming at June 22 meeting
By: Admin
June 19, 2024
Categories: GST Recent News
4 Min Read
The online gaming sector, which pays 28 percent as goods and services tax (GST) on the full face value involved, will have to wait longer for relief. A much-anticipated review of the levy is unlikely to be discussed at the upcoming GST Council meeting on June 22, according to people close to the matter. The review, initially scheduled to take place after six months from October 1, 2023, was expected to address critical issues surrounding taxation of the burgeoning online gaming industry.
The online gaming industry has been seeking 28 per cent GST on gross gaming revenue (GGR) instead of full face value. Gross gaming revenue (GGR) is the difference between the amount wagered minus the amount won. Full face value is the value of the bet or contest entry amount.
“The council will not address the comprehensive review of online gaming at the upcoming meeting. A review is not needed. There is no need seen at the moment for the review as industry has adjusted well to the higher tax implemented from October 1, 2023. Thus, the review is not part of the agenda in the upcoming council meeting on June 22,” a government official told Moneycontrol.
Since last October, a uniform 28 percent GST has prevailed on the full value of bets placed in online games, regardless of whether it involved games of skill or of chance. Industry stakeholders had been hopeful that the planned review may offer potential changes in the GST tailored to the unique nature of online gaming.
The GST Council has already clarified that the 28 percent levy will not apply on re-bets made without withdrawal of the amount, thus resolving a hig issue that the online gaming industry faced, the official said.
According to rule 31B and rule 31C of the Central Goods and Services Tax Rules, 2017, any amount received by the player by winning any event, including game, scheme, competition or any other activity or process, which is used for playing by the said player in a further event without withdrawing, shall not be considered as the amount paid to or deposited with the supplier by or on behalf of the said player.
Revenue secretary Sanjay Malhotra had earlier said that a review of the GST on online gaming will be done after six months from October 1, 2023, when the higher tax had kicked in. Due to the general election, no council meeting has been held so far this year.
However, any further review of the GST on online gaming will be made in subsequent council meetings only if a need is felt, he added.
Prior to October 1, 2023, the GST collection from online gaming was approximately Rs 200 crore per month. That has gone up quite substantially since to Rs 1,100 crore per month on account of higher GST rate.
Source from: https://www.moneycontrol.com/news/business/economy/council-unlikely-to-review-28-gst-on-online-gaming-at-june-22-meeting-12751687.html