Online gambling industry agrees with 28% GST if only levied on fees – The New Indian Express

By Express press service

NEW DELHI: The online gambling industry will agree with a 28% GST if the tax is levied on the commission/fees collected by the platforms and not on the total pooled amount. Roland Landers, CEO of the All India Gaming Federation (AIGF), said on Thursday that if the government settles the valuation aspect of the GST in favor of the industry, they would be fine with a 28% GST.

“We can afford a 55% higher tax expenditure (due to the 28% GST instead of 18%), but we cannot afford a 1,100% increase in tax liability ( if the government decides to tax the pooled amount instead of the earned fees),” he said. The online gambling industry has made representations against the government bracketing online gambling with the casino and horse racing.

The industry argued that unlike casinos and horse racing, online gambling is a game of skill rather than gambling and therefore should be taxed at 18% instead of 28% . The industry also objected to the tax authorities’ stance that GST would be levied on the total pool (pooled prize money plus platform commission) and not on gross gaming revenue (GGR). The matter is still pending before the GST Board, which has formed a Group of Ministers (GoM) to decide on both the assessment and tax rate issue.

Meanwhile, industry sources said GST authorities served the tax demand of Rs 49,000 crore to seven online gaming companies including Gamescraft, Dream11, Games 24×7 and Head Digital Work (which operates online games under the name of A23).

These companies have received a tax notice for allegedly engaging in betting and gambling and as a result the company is liable to pay 28% GST on the “face value” of cash-outs made.
Industry sources have said it is unthinkable to serve a tax demand notice of Rs 49,000 crore on a fledgling sector which generates revenue of just Rs 16,000 crore.

NEW DELHI: The online gambling industry will agree with a 28% GST if the tax is levied on the commission/fees collected by the platforms and not on the total pooled amount. Roland Landers, CEO of the All India Gaming Federation (AIGF), said on Thursday that if the government settles the valuation aspect of the GST in favor of the industry, they would be fine with a 28% GST. “We can afford a 55% higher tax expenditure (due to the 28% GST instead of 18%), but we cannot afford a 1,100% increase in tax liability ( if the government decides to tax the pooled amount instead of the earned fees),” he said. The online gambling industry has made representations against the government bracketing online gambling with the casino and horse racing The industry has argued that, unlike casinos and horse racing, online gaming is a game of skill rather than gambling and therefore should be taxed at 18% instead of 28% The industry also objected to the tax authorities’ position that GST would be levied on the total pool (pooled prize money plus platform commission) and not on revenue gaming gross (GGR) The case is still pending before the GST Board, which formed a Group of Ministers (GoM) to decide on both the issue of assessment and tax rate. Meanwhile, industry sources said GST authorities served the tax demand of Rs 49,000 crore to seven online gaming companies including Gamescraft, Dream11, Games 24×7 and Head Digital Work (which operates online games under the name of A23). These companies have received a tax notice for allegedly engaging in betting and gambling and as a result the company is liable to pay 28% GST on the “face value” of cash-outs made. Industry sources have said it is unthinkable to serve a tax demand notice of Rs 49,000 crore on a fledgling sector which generates revenue of just Rs 16,000 crore.

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