GST on online gaming: We have space to reach a middle-ground
The recommendation of India’s GST Council to impose a 28 % tax on the full face value of bets placed on online games has put the fate of the online skill-based gaming industry at serious risk. This is in direct contradiction with steps taken by the Union ministry of electronics and information technology (MeitY) to support the industry by introducing a regulatory system for permissible online gaming.
The MeitY consultations that led up to that framework, led by minister of state for IT Rajeev Chandrasekhar, were hailed widely in the industry as being comprehensive, inclusive and evidence-based. To avoid undoing the exemplary work done by MeitY over the last two years, the Centre and state governments have an opportunity to re-examine the GST Council’s recommendations, especially because they are not in line with the country’s overall policy on the gaming sector as publicly stated—including by a 2022 report by a task-force under the information and broadcasting ministry on the promotion of animation, visual effects, gaming and comics (AVGC) as a sector.
A simple reading of the announcement made by the GST Council throws up several questions and concerns. In the first place, it can be argued that under the Constitution, the GST Council cannot advise on amendments to the GST Act.
In any event, as per a recent Supreme Court decision, the recommendations of the GST Council are not binding on the central government and state legislatures. The other major issue is that, according to the government, the proposed amendments are clarificatory in nature and the GST law always intended to tax the entire bet value at 28%.
Read more on livemint.com
