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GST Council recommends certain amendments in CGST Act 2017 and IGST Act 2017, including amendment in Schedule III of CGST Act, 2017, to provide clarity on taxation of supplies in casinos, horse racing and online gaming
GST Council also recommends inserting a specific provision in IGST Act, 2017 to provide for liability to pay GST on supplier located outside India supplying online money gaming to a person in India
GST Council recommends GST on valuation of supply of online gaming and actionable claims in casinos at entry level
2nd August 2023
The 51st GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman via video conferencing in New Delhi today. The meeting was also attended by Union Minister of State for Finance Shri Pankaj Chaudhary besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.
The GST Council in the 50th meeting held on 11.07.2023 had deliberated on the Second Report of the Group of Ministers (GoM) on Casinos, Race Courses and Online Gaming and had recommended that the actionable claims supplied in Casinos, Horse racing and Online gaming may be taxed at the rate of 28% on full face value, irrespective of whether the activities are a game of skill or chance. The Council had also recommended that the law may be amended to provide clarity in the matter.
Accordingly, the GST Council in its 51st meeting recommended certain amendments in the CGST Act 2017 and IGST Act 2017, including amendment in Schedule III of CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming. The Council also recommended to insert a specific provision in 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 of access by the public to any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier in case of failure to comply with provisions of registration and payment of tax.
The Council also recommended that valuation of supply of online gaming and actionable claims in casinos may be done based on the amount paid or payable to or deposited with the supplier, by or on behalf of the player (excluding the amount entered into games/ bets out of winnings of previous games/ bets) and not on the total value of each bet placed. The Council recommended that CGST Rules, 2017 may be amended to insert specific provisions for valuation of supply of online gaming and supply of actionable claims in casino accordingly. The Council also recommended issuance of certain notifications/ amendment in notification related to the issue.
It was also decided by the Council that effort will be made to complete the process of making amendments in the Act at the earliest and bring the amendments into effect from 1st October 2023.
Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of the stakeholders. The same would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.
Online gaming GST liability clarified, with cross-border suppliers subject to registration and valuation tied to amounts paid to the supplier. Proposed amendments to the CGST and IGST Acts and Schedule III clarify taxation of casinos, horse racing and online gaming, prescribe that cross-border suppliers of online money gaming be liable to pay GST with a simplified single-registration in India and potential blocking of access on non-compliance, and direct valuation of online gaming and actionable claims based on amounts paid or deposited with the supplier (excluding amounts wagered from prior winnings), with CGST Rules and notifications to be amended accordingly.
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Online gaming GST liability clarified, with cross-border suppliers subject to registration and valuation tied to amounts paid to the supplier.
Proposed amendments to the CGST and IGST Acts and Schedule III clarify taxation of casinos, horse racing and online gaming, prescribe that cross-border suppliers of online money gaming be liable to pay GST with a simplified single-registration in India and potential blocking of access on non-compliance, and direct valuation of online gaming and actionable claims based on amounts paid or deposited with the supplier (excluding amounts wagered from prior winnings), with CGST Rules and notifications to be amended accordingly.
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