GST on Online Gaming needs to be looked differently than Casinos and Horse Racing
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GST Council and Ministry of Finance had constituted a Group of Ministers to determine the GST rate and taxation on Casinos, Race Courses and Online Gaming. The GoM is scheduled to meet on 2nd May 2022 under Meghalaya Chief Minister Conrad Sangma. There have been well established decisions by various Courts in support of online games involving skill. Industry bodies like Indiatech.org had sent multiple recommendations around tax treatment of these games.
GST on Online Gaming needs to be looked differently than Casinos and Horse Racing. Online gaming industry in India has been burgeoning in the past few years with the emergence of over one thousand startups. The GoM should continue to consider platform fee/ GGR as value of supply. Online games involving predominance of skill should be taxed at 18% on the platform fees. All leading markets tax on G GR at a rate between 7 and 20%. Countries that started taxing the prize pool instead of the Ggr have now reverted back to taxing only GGr.
