GST Clarity on Online Gaming and Cement likely at Upcoming GST Council Meeting

The GST Council‘s upcoming meeting, which is probably next month, is expected to provide the long-awaited clarification on the tax rates for online gaming.

At the meeting, the council will also discuss whether to change the prices for cement and millet. A finance ministry official predicted that the council will meet in June because the state elections would be concluded by then.

The GST Council’s report on internet gaming, horse racing, and casinos is expected to be discussed at its upcoming meeting, and the official expressed hope that it will be accepted.

Conrad Sangma, the chief minister of Meghalaya, who chairs the GoM, was unable to attend the 49th meeting of the council in February because of the state’s elections, hence the report was not discussed there.

There is disagreement over how to tax internet games and whether they should be classified as games of chance or skill.

Currently, all forms of online betting and gambling are subject to a 28% GST tax, but other games are only subject to an 18% duty on gross gaming revenue (GGR).

The ministry of electronics and information technology’s notification of the IT Intermediary Amendment Rules after the Finance Act of 2023 was changed gave the online gambling business assurance that the government will maintain its 18% GST rate.

Stakeholders were concerned that adding 28% GST to GGR would result in a huge tax increase with an impact of up to 1,100% on the company and 300% on the players.

The Finance Act 2023 specifically notes that gamers are subject to income tax; at the end of the financial year, a TDS of 30% is to be subtracted from “net winnings” in the user account.