GoM on GST for casinos, race course and online gaming reconstituted
New Delhi, February 13|Updated on:Feb 13, 2022
GoM on lottery could not discuss the issue
The Finance Ministry has reconstituted the Group of Ministers to look into GST-related matters related to casinos, race course and online gaming. However, there is no change in Terms of Reference (ToR)
Now, Meghalaya CM K Sangama will be convenor, replacing Nitin Patel, who was dropped from the Gujarat’s Council of Ministers in September last year. The then Home Minister and present Chief Minister of Karnataka, Basavaraj Bommai, and Deputy Chief Minister of Arunachal Pradesh, Chowna Mein, are no longer part of the group. Finance Minister of Uttar Pradesh, Suresh Khanna, is the new entrant, while the Finance Minister of Gujarat, Kanubhai Patel, has taken the place of Nitin Patel. Also, West Bengal has a new representative in the group, as Amit Mitra has resigned as the Finance Minister and his place has been taken by his successor, Chandrima Bhattacharya.
This is the second change in the composition of present group, which was constituted on May 24 last year. Interestingly, the group is yet to meet even once since the formation. The GST rate applicable on online games involving betting or gambling is 28 per cent, and GST rate applicable on games not involving betting or gambling is 18 per cent.
Issues to be examined
According to ToR, the committee is to deliberate on four issues. It will examine the valuation of services provided by casinos, race courses and online gaming portals, and taxability of certain transactions in a casino. This will be done taking into account the existing legal provisions and orders of courts on related matters.
The committee has been asked to suggest whether any change is required on the legal provisions to adopt better means of valuation of these services (casinos, race course and online gaming). It will examine the administration of such valuation provision if an alternative means of valuation is recommended. It will also evaluate impact on other similarity placed services like lottery.
Initially, it was said the committee will submit its report within six months which is already over.
Earlier, the Group of Ministers on lottery, formed in January 2019, it its report mentioned that it received miscellaneous representations similar to lotter. It recommended that the rate and valuation issues of casinos, horse racing, online gaming and betting may be referred to Fitment/Law Committee, and then taken to GST Council, either directly or through GoM as approved by the Union Finance Minister.
Later, the issue figured prominently in the 35 and 37 GST Council Meeting held on June 21, 2019, and September 20, 2019, respectively. In the June meeting, an agenda item was included to discuss representation regarding value for the purpose of taxation be defined. It was proposed that methodology and procedure for deciding face value and bet amount for determining tax may be referred to the Law Committee. The issues of GST rate may be referred to Fitment Committee. GoM may decide on these associated issues in the subsequent meetings after due inputs have been received from the Law and the Fitment Committee.
For the September meeting, Fitment Committee (a sub-committee of the council comprising officials and which prepare recommendation on rate proposal) considered a proposal for reducing GST to 18 per cent from 28 per cent on wagering in horse racing, besides excluding prize money from the taxable value of horse racing. The committee recommended deferring the matter and the council went by that. In the next meeting held on March 14, 2020, the matter came up for discussion. It was said that GoM on lottery could not discuss the issue. Then the council decided to refer the matter to the Law Committee/Fitment Committee.