CBIC Chairman Online games where winning is contingent on a certain outcome would attract 28% GST on the whole bet value, Central Board of Excise and Customs chief Vivek Johri said on Saturday, even as the GST Council awaits the report of a committee of ministers on the thorny topic.
“The department’s position on levying GST on online gambling is unequivocal. On actionable claims deriving from betting and gaming, GST at the rate of 28% is due. “The tax is due on the whole winning value, not on the margin,” Johri remarked when asked what the CBIC’s stance would be on these enterprises.
According to Vivek Johri, head of the Central Board of Indirect Taxes, online games where victory is contingent on a specified outcome would be subject to a 28 percent GST. Vivek Johri, chairman of the Central Board of Indirect Taxes, announced on Saturday that online games where winning is contingent on a certain outcome will be subject to a 28% GST on the whole wager value.
Though the Group of Ministers (GoM) report on online gambling was not discussed at the GST Council, the department believes that 28 percent GST is payable on the whole bet value placed by a player, not on the margins.
The statements are significant since the GST evasion case involving Gameskraft Technology Pvt. Ltd (GTPL) is still pending in court.
The Directorate General of GST Intelligence (DGGI) issued a show cause notice to Bengaluru-based online gaming business Games raft Technology Pvt. Ltd (GTPL) in September for failing to pay Goods and Services Tax (GST) of Rs 21,000 crore.
When asked what the Central Board of Indirect Taxes (CBIC) would do in the absence of a Council decision on the GoM report, Johri stated that the department believes that 28% GST is payable on actionable claims arising from betting or gambling, and that the tax is to be paid on full value, not net of margins.
“Gaming is considered gambling since the winning is contingent on a specific outcome,” Johri explained. The GoM report could not be discussed in the GST Council since it arrived only two days before the meeting and hence could not be disseminated to the states. Before tabling any agenda item, the GST Council secretariat usually notifies GST Council members.
Meghalaya Chief Minister Conrad Sangma presided over the Group of Ministers (GoM), which delivered its report to Finance Minister Nirmala Sitharaman on Thursday.
The GoM agreed to a 28% GST on online gambling casinos and horse racing at its most recent meeting in November.
However, in the lack of agreement on whether the tax should be applied on solely the fees collected by the site or the whole consideration received from participants, the GoM opted to forward all ideas to the GST Council for a final decision.
Finance Minister Nirmala Sitharaman told reporters after the GST Council meeting on Saturday that the GoM report will be “examined threadbare” when the Council takes it up for debate.