India: GST Council likely to consider gambling tax this week

A goods and services tax (GST) of 28 per cent for online gaming, racecourses, and casinos is likely to be discussed this week.

India.- The Goods and Services tax (GST) Council will hold meetings June 28 and June 29 to discuss the possibility of introducing a GST of 28 per cent for online gaming, racecourses, and casinos. The proposal was made by a Group of Ministers (GoM) headed by Meghalaya chief minister Conrad Sangma.

He says online gambling should be taxed in full on the consideration paid by the player for participation in the game, including competition entry fees. As for race courses, the group proposes GST be imposed on the full value of bets accumulated in totalisators and placed at bookmakers.

For casinos, the GoM recommended taxing the full face value of chips/coins purchased by casino players. The GST will no longer be charged on the betting value of each round of betting, including bets won in previous betting rounds.

In addition, the GoM proposed a 28 per cent GST on entry fees to casinos, including food and drinks. However, according to local media reports, optional deliveries made independently of the ticket would be taxed at the rates applicable to such deliveries. Most businesses currently pay 18 per cent on cash collected from each game.

Earlier this month, a seven-member team that includes state ministers was tasked with identifying a nodal ministry to oversee gaming. Its responsibilities include developing regulatory mechanisms to protect players and business principles for a possible legalisation of gambling.

The group will reportedly pay particular attention to the legal and legislative frameworks used by other regulators around the world to inform policies applicable to areas of India where there is gambling sentiment. The hope is that legalising gaming would help curb illegal offerings.