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02 May 2022

The Group of Ministers (GoM) constituted by GST Council to examine the taxation issues in casinos, racecourses, and online gaming, held a meeting today at North Block, Delhi. The GoM was reconstituted recently by the Ministry of Finance, Government of India with a mandate to study the GST rates for casinos, racecourses and online gaming.

The GoM is headed by Meghalaya Chief Minister, Conrad Sangma. Meghalaya legalised gambling recently and issued three provisional licenses for setting up casinos in the State.  The next meeting will be held in the 3rd  week of May, tentatively on May 18. Last year, Sangma led the GoM to study GST rates on Covid related materials.

Other members of the reconstituted GoM include Ajit Pawar, Deputy CM of Maharashtra, Chandrima Bhattacharya, West Bengal’s Minister of Finance, Kanubhai Patel,  Gujarat’s Minister of Finance, Mauvin Godinho. Minister of Transport and Panchayati Raj of Goa, Dr Palanivel Thiaga Rajan, Minister of Finance of Tamil Nadu, Suresh Kumar Khanna, Minister of Finance of Uttar Pradesh, and Thanneeru Harish Rao, Minister of Finance of Telangana.

According to reports, the GOM agreed on the 28% slab and the next meeting will discuss the valuation methodology. 

Earlier in October 2021, the GST Secretariat had asked the GST Council to provide clarity on the GST rate and the applicability of the levy on the services related to online gaming, casinos, and horse racing. This followed a directive dated September 29 from the Punjab Haryana High Court (PHHC) on the matter. The PHHC had directed the GST department to take no coercive action on an online gaming company against the demand notices until the GOM constituted to examine the issue to provide clarity.

Earlier, the Group of Ministers on lottery, formed in January 2019, in its report mentioned that it received miscellaneous representations similar to a lottery. It recommended that the rate and valuation issues of casinos, horse racing, online gaming and betting may be referred to the Fitment/Law Committee, and then taken to GST Council, either directly or through GoM as approved by the Union Finance Minister.

Later, the issue figured prominently in the 35th and 37th GST Council Meetings held on June 21, 2019, and September 20, 2019, respectively. In the September 2019 meeting, the Fitment Committee (a sub-committee of the council comprising officials to prepare recommendations on rate proposals) considered a proposal for reducing GST to 18 per cent from 28 per cent on wagering in horse racing, besides excluding prize money from the taxable value of horse racing but deferred the decision.

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