Central Board of Excise and Customs chief Vivek Johri said online games where winning is dependent on a certain outcome would attract 28% GST on the full bet value.
Working it out
This comes even as the report of a group of ministers on the contentious issue is still awaited by the GST Council.
“GST at the rate of 28% is payable on actionable claims arising out of betting and gambling. The tax is payable on the full winning value and not net of margin,” Johri said.
The GoM report on online gaming, horse racing and casinos was not discussed at the GST Council.
Issue long pending
“It is betting and gambling as the winning certainty is dependent on a certain outcome,” he said.
The Directorate General of GST Intelligence had issued a show-cause notice to Karnataka-based online gaming platform Gameskraft for not paying GST of Rs21,000 crore.
The CBIC is also investigating gaming companies, including online gaming firms for which the estimated evasion of GST by these companies works out to Rs 22,936 crore, relating to the period April 2019 to November 2022.
28% approved
Revenue secretary Sanjay Malhotra had said the report of the Group of Ministers chaired by Meghalaya chief minister Conrad Sangma was received only a “couple of days ago” and was not part of the agenda of the 48th meeting of the GST Council.
“Members would not have had time to read it. The report was not circulated,” Malhotra said.
The GoM is in favour of the 28% tax on online gaming, horse racing and casinos.
Pertaining questions
However there’s no consensus as to whether tax should be only on the fees or the entire amount under consideration.
Accordingly, the GoM had decided to refer its recommendations to the GST Council for a final decision,
Council chair and Union finance minister Nirmala Sitharaman said the GoM report would be “discussed threadbare” when the council takes it up for discussion.
