GST on online gaming, casinos, racing: issues in the debate
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The final call about the valuation mechanism will be taken by the GST Council. The panel met on Tuesday (November 22) and is likely to fall back on the initial report presented before the council in June. Online gaming platforms currently pay 18 per cent GST on platform fee alone and not on full value including prize money.
Most states agree on a 28% tax rate for gaming, but differ on the valuation mechanism. West Bengal and Uttar Pradesh support taxing the total value, while Goa recommends a tax on entry point for casinos. The views of all states will be incorporated in the final version of the report. It will then be presented before the Council in its next meeting.
The GoM recommended a uniform rate of 28% on casinos, race courses and online gaming. Goa's concerns on gambling were given a 15-day extension. The discussions then focused on valuation. The GoA wants to come up with a mechanism of arriving at GGR or net value. It is not clear if the online games are actionable claims other than betting and gambling.
GST should be applied at 28% on the face value of the bets placed in each round of betting and 28%. The industry argues that if betting, gambling and horse racing are taxed on full value, the organisers will have to pay from their pockets. The increase in the bet amount would reduce the prize pool amount and discourage players.
