Updated on: Aug 3rd, 2023
6 min read
The GST Council was held on Wednesday, 2nd August 2023, via video conferencing, chaired by Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman. This Council meeting was held to clarify the government’s stance on the taxation of online gaming and casinos, based on the recommendations of the Council in the 50th GST Council meeting held just a few weeks earlier, on 11th July.
Here are the highlights of the 51st GST Council meeting.
For some background, the GST Council had recommended in the 50th meeting that the actionable claims supplied in casinos, online gaming, and horse racing may be taxed at 28% GST on the full face value, irrespective of whether the activity was a game of skill or chance.
Now, in a bid to remove all ambiguity, the Council held a follow-on discussion in its 51st meeting to clarify its stance as follows-
*To come into effect once notified by the CBIC.
In the 50th GST Council meeting, the Council discussed and deliberated on the taxability of casinos, race courses and online gaming. After taking into consideration the recommendations of the Group of Ministers (GoM) report, the Council reached a consensus to levy GST at 28% on all three aforementioned activities.
The GST Council further recommended that-
The move to levy 28% GST received a lot of flak, especially from the online gaming sector. By charging GST on the full value of the bets placed, the potential winnings for a customer will drastically drop. This, in turn, will deter players and overall impact the revenues of the online gaming business. (Previously, GST was only levied on the commission that the online gaming app charged.)
Now, the GST Council plans to meet on 2nd August 2023 to approve the rules to implement the 28% GST levy on casinos, race courses and online gaming. Further, it is expected that the GST Council may take the stringency of these rules up a notch and impose measures on gaming/gambling apps and platforms that avoid paying taxes. Such apps and platforms could even face a ban or other strict action.
We at Clear will bring you live updates from the GST Council meeting, so watch this space for the latest news, highlights, press release, and more!