The GST council on Wednesday postponed the proposal to impose a 28 percent tax on casinos, online gaming, casinos and lotteries, as the GST council gave the group of ministers (GoM) time until July 15 to reconsider the issues. investigations and its new report.
The two-day 47th GST council meeting was held in Chandigarh on Tuesday and Wednesday and the council’s final decision was announced on Wednesday.
The panel had recommended taxing online gaming at the full value of the consideration, including the entry fee that the player pays to participate in the game. In the case of racing courses, the GoM has recommended levying GST on the full value of bets collected in the totalizers and placed with the bookmakers.
Union Finance Minister Nirmala Sitharaman said on Wednesday that the Council believed, on the face of it, that the common thread connecting them is that these activities are in the nature of “gambling” and should be taxed accordingly.
She added that the Prime Minister of Goa said that casinos should be treated differently from the other activities – horse racing, online gaming and lotteries. The Minister of Finance added that the GoM has been given until July 15 to study and submit a new report. The council will meet exclusively in the first week of August to discuss the new GoM report and a final decision will be made.
The GoM had recommended that no distinction be made for the levy of GST on the basis of skill or games of chance. The panel added that the VAT rate for all such activities should be 28 percent.
On the valuation, GoM said that in the case of online gaming, the full consideration, including the competition entry fee, must be paid by the player for participation; in the case of racing courses it must be the full value of the bets collected in the totalizer and placed with bookmakers. It also said that for casino valuation, it should be the full face value of chips/coins purchased by a player from the casino.
It added that once GST is levied on chip/coin purchases (at face value), no further GST should apply to the value of bets placed in any betting round, including those involving winnings from previous rounds. The entrance fee to casinos, including the price of one or more other necessities such as food, drink, etc., will be 28 percent.
However, according to sources, the GST Council has decided to accept the recommendations of three groups of ministers (GOMs) on tariff rationalization, GST system reforms and the movement of gold and precious stones.
The GST Council has accepted the government’s interim report on tariff rationalization, according to the sources. The group of ministers was established in September last year and was headed by the chief minister of Karnataka, Basavaraj S Bommai. The Council has, inter alia, accepted the position of the GoM to withdraw the GST exemption for packaged curd, lassi, buttermilk, puffed rice, flat rice, dried rice, porridge, paneer, honey, food grains, cereals, cane sugar and certain vegetables she added.
The Council has agreed and accepted to approve the government’s report on GST system reforms, the sources told CNBC-TV18. The GoM was established in September last year under the convenorship of Maharashtra’s Deputy Chief Minister Ajit Pawar.
It has also accepted the GoM’s recommendations on generating electronic bills of lading for gold/gold jewelry and gemstones, the sources said. It was established in February of this year under the covenant of the Minister of Finance of Kerala, KN Balagopal. The recommendations include allowing states to impose the e-waybill requirement for intrastate transportation of gold/gems, if they wish.
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