GST for Casinos, Race Course and Online Gaming Reconstituted by GoM

GST for Casinos, Race Course and Online Gaming Reconstituted by GoM The Group of Ministers has been convened by the Finance Ministry to examine into GST-related issues involving casinos, racetracks, and internet gambling. The Terms of Reference, on the other hand, remain unchanged (ToR) K Sangama, the chief minister of Meghalaya, will now serve as convenor, succeeding Nitin Patel, who was removed from the Gujarat Council of Ministers in September last year. Basavaraj Bommai, the then-Home Minister and current Chief Minister of Karnataka, and Chowna Mein, the then-Deputy Chief Minister of Arunachal Pradesh, are no longer members of the group. Suresh Khanna, the Finance Minister of Uttar Pradesh, is a newcomer, whereas Kanubhai Patel, the Finance Minister of Gujarat, has replaced Nitin Patel. In addition, West Bengal now has a new representative in the group, since Finance Minister Amit Mitra has resigned and been replaced by Chandrima Bhattacharya. This is the second time the current group's composition has changed since it was formed on May 24 of last year. Surprisingly, the group has failed to meet since its inception. The GST rate for online games that involve betting or gambling is 28%, whereas the GST rate for games that do not involve betting or gambling is 18%.

Examinable Issues

The committee will discuss four problems, according to the ToR. It will look into the value of services offered by casinos, racetracks, and internet gaming portals, as well as the taxability of some casino transactions. This will be done in accordance with existing legal provisions and judicial rulings on the subject. The committee has been requested to recommend whether any changes to the legal rules are required in order to adopt better methods of valuing these services (casinos, race course and online gaming). If an alternative method of value is recommended, it will analyse the administration of such a valuation provision. It will also assess the impact on other similarity-based services, such as lottery tickets. The group was supposed to present its report within six months, but that time has passed. Previously, the Group of Ministers on Lotteries, which was constituted in January 2019, stated in its report that it had received a variety of representations that were similar to lottery. It was suggested that rate and valuation concerns relating to casinos, horse racing, internet gambling, and betting be addressed to the Fitment/Law Committee, and subsequently to the GST Council, either directly or through the GoM, as agreed by the Union Finance Minister. The subject was also discussed at length at the 35th and 37th GST Council Meetings, which took place on June 21, 2019 and September 20, 2019, respectively. A discussion on representation regarding value for the purpose of taxation was included on the agenda for the June meeting. It was suggested that the Law Committee look into the methodology and procedure for assessing face value and bet amount for tax purposes. GST rate problems could be referred to the Fitment Committee. After receiving information from the Law and the Fitment Committee, the GoM may decide on these related concerns in upcoming meetings. Fitment Committee (a sub-committee of the council comprised of officials that prepares recommendations on rate proposals) considered a proposal for lowering GST on horse racing wagering from 28 percent to 18 percent, as well as excluding prize money from the taxable value of horse racing, at its September meeting. The committee suggested that the subject be postponed, and the council agreed. The matter was discussed in the next meeting, which was held on March 14, 2020. According to reports, the GoM on lottery was unable to debate the matter. The council then agreed to refer the case to the Law/Fitness Committee.