28% GST on online gaming, casinos and race courses to boost revenues: FM

Finance Minister Nirmala Sitharaman on Tuesday said the 28% Goods and Services Tax (GST) on the full-face value of supplies in casinos, race courses and online gaming will yield higher revenues as most of these service providers are currently paying 18%/28% GST on platform fees or service charges.

Casinos are currently paying 28% GST on Gross Gaming Revenue (platform fees). The online gaming industry supplying actionable claims and some horse race clubs are currently paying GST at 18% on platform fees/commissions ranging from 5% to 20% of the full face value while some horse race clubs are paying 28% on the full face value.

In FY23, the Centre collected Rs 1,700 crore GST from online gaming, Rs 300 crore from casinos and Rs 80 crore from horse racing activities. In other words, GST receipts from the burgeoning online gaming industry fetched barely 2% of its estimated turnover of Rs 85,000 crore in FY23.

“It is anticipated that the levy of 28% on full face value, as recommended in the 50th GST Council meeting will result in increase of revenue from current levels,” Sitharaman told Rajya Sabha in a written reply.

 

The Group of Ministers on Casinos, Race Courses and Online Gaming constituted by the GST Council, held extensive stakeholder consultations and examined the issue in detail which were mentioned in its reports submitted to the GST Council.

After detailed deliberations, the GST Council in the 50th meeting held on 11th July, 2023 has clarified that actionable claims supplied in casinos, race courses and online gaming are leviable GST at a rate of 28%.

These online gaming companies supplying actionable claims and some horse race clubs paying 18% on platform fee/commission are disputing the 28% levy on actionable claims in the form of betting and gambling before various legal fora.

GST rates and exemptions are prescribed on the recommendations of GST Council, a constitutional body comprising members from the Union Government and State/UT Governments.

At the time of launch of GST, state taxes on betting and gambling such as betting tax and entertainment tax were subsumed in GST. She said it was a conscious decision of the GST Council to recommend 28% tax on actionable claims in the form of betting and gambling.

Source::: FINANCIAL EXPRESS ,  dated 09/08/2023.