New Delhi. Central and state GST officials are working with experts in the online gaming industry to interpret “games of skill” and “games of chance” so that the two types create a separate taxation structure for the sports. Sources gave this information.
The sensitive issue of imposing the Goods and Services Tax (GST) on online gambling has been the subject of controversy for over a year now. Several states have required a lower tax rate on online games that require skill. He is of the opinion that games of skill should not be equated with games of chance. In the absence of a clear definition of these games, tax notices are often sent to online gambling portals and subsequent litigation begins.
Sources said that the GST Council Legislative Committee, during its meeting held in Bengaluru on Saturday, discussed issues related to the definition of ‘gambling’ and ‘gambling of skill’ with experts from the technical sector. In the absence of all states on the legislative committee, the draft definition report will be shared with all states and their input will be sought.
The GST Council will consider the report of the Group of Ministers on the taxation of sports such as online gambling, casinos and horse racing at a meeting to be held at the end of December. The GoM had suggested in June that the online gambling sector be taxed at the rate of 28%.
However, the industry is calling for games of skill to be taxed at a lower rate, as prize money is expected to be reduced due to higher tax rates. Currently, GST is levied at the rate of 28% on accidental gambling.