A group of ministers led by Meghalaya chief minister Congrad Sangma that is advising the GST Council is set to recommend a goods and services tax rate 28% on casinos, race courses and online gaming.
Sangma said in a social media post on Wednesday that the group of ministers has come to a consensus. The report of the GoM will be handed over to finance minister Nirmala Sitharaman in a day or two and the matter will be presented in the next GST Council meeting, Sangma said in the post without mentioning the tax rate the committee will propose.
A person informed about the discussions in the ministerial group said the consensus was for a 28% GST rate on these items. The report will also specify the base on which the tax rate will apply.
Currently, casinos, race courses and online gaming firms are paying 18% GST, backed by court orders in the absence of clarity on the matter. Businesses claim that these are games of skill rather than betting or gambling.
Earlier this month, Sangma told Mint that the online gaming business is almost touching Rs 30,000 crore annually. “It is seeing 20-30% growth every year. Therefore we need to take the right decision,“ he said.
Experts, however, expressed concern over the highest slab being proposed on these businesses.
“Keeping game of skill and game of chance at par and taxing both the games at sin rate of 28% will be detrimental to the nascent Indian online gaming sector,” said L Badri Narayanan Executive Partner at Lakshimkumaran and Sridharan Attorneys. Experts are awaiting details of the valuation on which the tax rate will apply.