The 51st meeting of the Goods and Services Tax (GST) Council was held on 2nd August 2023 via virtual mode in New Delhi, under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The key highlights of the meeting are as follows:
GST on casinos, online gaming, and horse racing
The Council decided to levy a GST of 28% on all three activities, irrespective of whether they are a game of skill or chance. This will be a single rate of GST applicable to all aspects of these activities, including the entry fee, bets placed, and winnings. The Council also recommended amendments to the Central Goods and Services Tax Act, 2017, and State Goods and Services Tax Act, 2017 to provide clarity on the taxation of these activities. These amendments are expected to come into effect from 1st October 2023.
Definition of actionable claims
The Council approved a clear definition of actionable claims, which will be taxable at 28%. Actionable claims are defined as any right to claim money or any other consideration, whether or not it is enforceable by law. This definition is expected to bring clarity to the taxation of various types of transactions, such as the sale of lottery tickets and the purchase of gambling chips.
Inclusion of online money gaming in the definition of online gaming
The Council decided to include online money gaming in the definition of online gaming. This means that online money gaming will also be subject to a GST of 28%. Online money gaming is defined as any game played online where the player pays to participate and stands a chance to win money or other prizes.
Simplified registration scheme for online gaming suppliers
The Council approved a simplified registration scheme for online gaming suppliers in India. This scheme will make it easier for online gaming suppliers to register for GST and comply with their tax obligations.
Measures to block public access to non-compliant online gaming apps/platforms
The Council approved measures to block public access to online gaming apps/platforms that are not compliant with GST rules. This will help to ensure that all online gaming suppliers are paying their fair share of taxes.
Review of GST implementation in online gaming after six months
The Council decided to review the implementation of GST in online gaming after six months. This review will assess the impact of the new tax regime on the industry and make any necessary recommendations.
Other highlights
The Council also discussed a number of other issues, including the taxation of virtual digital assets and the place of supply for certain services. However, no decisions were taken on these issues at this meeting.
Impact of the 51st GST Council Meeting
The decisions taken at the 51st GST Council meeting are expected to have a significant impact on the online gaming and casino industries in India. The imposition of a 28% GST rate on these activities is likely to increase the cost of doing business for these industries. However, it is also expected to bring in additional revenue for the government. The simplified registration scheme for online gaming suppliers is likely to make it easier for new entrants to enter the market and comply with their tax obligations. The measures to block public access to non-compliant online gaming apps/platforms are likely to reduce the number of illegal online gaming operations in India.
Overall, the 51st GST Council meeting has taken a number of positive steps to regulate and tax the online gaming and casino industries in India. These steps are likely to make these industries more transparent and accountable and generate additional revenue for the government.