The 51st GST Council Meeting has put forth several recommendations regarding the taxation of supplies in casinos, horse racing, and online gaming.
These recommendations aim to bring clarity and efficiency to the GST regime for these specific sectors.
How GST Taxed on Online Games, Casino and Horse Race:
Suitable amendments to be made to law to include online gaming and horse racing in schedule III as taxable actionable claims, to offer a clear understanding of the taxation framework for supplies in casinos, horse racing, and online gaming.
What will be Valuation Rules on Online Games, Casino and Horse Race :
The Council suggests that for online gaming and actionable claims in casinos, GST should be levied on the valuation at the entry level.
Also, the valuation of these supplies could be determined based on the amount paid or payable to the supplier by the player (excluding amounts used for bets from previous winnings), rather than the total value of each bet placed.
GST @ 28% on Face Value or Winning Amount?:
To simplify implementation and avoid complications, the GST Council has decided to impose a 28% GST on the face value of bets and games, rather than the gross gaming revenue (GGR).
Tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker/totalisator in the case of Horse Racing and on the full value of the bets placed in case of the Online Gaming.Â
GST Liability for Overseas Suppliers:
The Council recommends the introduction of a specific provision in the IGST Act 2017. This provision would establish the liability to pay GST for suppliers located outside India, who offer online money gaming services to individuals in India.
Single Registration for Overseas Suppliers:
As a step towards ease of compliance, the GST Council suggests the inclusion of a simplified registration scheme allowing overseas suppliers to obtain a single registration in India.
Non-Compliance Consequences for Foreign Players:
To enforce compliance, the Council proposes blocking public access to any data related to the supply of online money gaming services by foreign suppliers who fail to adhere to registration and tax payment provisions.
Implementation Timeline:
The Council aims to expedite the process of amending relevant Acts, with the changes expected to be effective from 1st October 2023.
Note: The provided recommendations have been summarized in this release to provide stakeholders with a simplified understanding of the decisions made by the GST Council. These recommendations will be officially enforced through appropriate circulars, notifications, and legal amendments, which will carry the full legal weight.
