Uncertainty on bills to amend 28% GST on online gaming, casinos, horse racing

On July 11, the Council recommended all three namely Casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28 per cent

Uncertainty prevails over introduction of bills during the monsoon session of Parliament to implement Goods & Services Tax (GST) at uniform rate of 28 per cent on full face value for online gaming, casino and horse racing. The government aims to implement the decision from October 1.

The Monsoon Session of Parliament ends on August 11. On August 4, while business for week starting August 7 was announced, the bill to amend CGST Law was not listed. On the same day, the Cabinet meeting took place and sources confirmed that it did not consider any bill to amend CGST Act 2017 and IGST Act 2017. However, sources said this may not be the end of the matter. The option of promulgating ordinance is available to the government.

According to sources, the government can move a supplementary list of business for a specific legislation, even not discussed in Business Advisory Committee (BAC) of the House. Also, post-facto approval can be given to a bill. However, the issue is with the time. BAC has allocated three days (August 8,9 and 10) for debate on no-confidence motion.

If the debate is allowed under a rule, where all other businesses are required to be suspended for debate on the motion, then a bill cannot be taken up. Also, August 11 is Friday, scheduled for Private Members’ Bills and offers very limited time for government businesses after question hour and zero hour.

What is the Bill

A Finance Ministry statement said GST Council, in its meeting on August 2, nearly unanimously recommended amendments in Schedule III of the CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing, and online gaming. This amendment will make all three taxable actionable claims.

A specific provision will also be inserted in the IGST Act, 2017 to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India for the said supplier through a simplified registration scheme, and also for blocking access by the public to any information generated, transmitted, received, or hosted in any computer resource used for the supply of online money gaming by such a supplier in case of failure to comply with the provisions of registration and payment of tax.

On July 11, the Council recommended all three namely Casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28 per cent. Tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker/totalisator in the case of Horse Racing and on the full value of the bets placed in case of the Online Gaming.

Once the Centre amends CGST and IGST Acts and States/Union Territories (with legislatures) make changes in SGST Acts, then detailed rules will can be prescribed for the implementation.