Online gambling industry debates higher GST rate

Posted: Date Posted – 16:17, Sun – 15 May 22

Representative picture

Hyderabad: The Group of Ministers (GoM) formed by the GST Council to consider taxation of the online gambling industry met on 2 May and reached consensus on increasing the tax rate from 18% to 28%. And in the second meeting to be held on May 18, the GoM may consider the issue of assessment, i.e. whether to tax gross gaming revenue (GGR), which is the practice. current, or the entire prize pool, which is an actionable claim under the law.

In this context, the debate on the need to increase the GST is gaining momentum within the industry and they argue vigorously against regime change to protect the industry from degrowth and the shift of business to the foreign. The industry has vehemently opposed the Department of Finance’s proposal to levy GST on 30% of the registration fee 115% surcharge instead of the platform fee/gross gaming revenue (GGR).

In a press release, industry representatives said Telangana Finance Minister Harish Rao, who is also part of the GoM, must take a holistic view as their decision will impact the status of Hyderabad as a major center for game development and that startups will bear the brunt of it.

IndiaTech.Org CEO Rameesh Kailasam said, “There is a need for games involving skill predominance to ideally be taxed at 18% on platform fees. The GoM should ideally take a positive view and recommend maintaining the current practice of considering platform/GGR fees as the value of the offer. Since online skill-based games are not gambling, betting or betting, a clarification needs to be released to resolve disputes and provide relief to the industry.

Drawing parallels to the international tax structures of the online gambling industry, industry experts pointed to some top international markets like the US, UK, Australia and Australia. Germany, pointing out how they levy a tax on the GGR at a rate of between 15 and 20%. Senior Advocate for the Supreme Court of India, Gopal Jain, said: “We have seen internationally that markets that started taxing the kitty instead of the GGR have had to revert to taxation only to the GGR, as it resulted in non-compliance, revenue leakage and grey. markets”.

It can be a win-win scenario for all stakeholders if the uncertainty in policy-making and taxation of skill-based online games is resolved at the earliest. This in turn will help the Telangana government in the long run and make Hyderabad a dominant global force in AVGC software development, the statement said.

You can now get handpicked stories from Telangana today on Telegram every day. Click the link to subscribe.

Click to follow Telangana Today Facebook page and Twitter .

Comments are closed.