GST Panel may not treat online gaming as gambling

NEW DELHI: The Group of Ministers (GoM) on casinos, race courses and online gaming are open to considering different rates and valuation methods for all three games. This necessarily means that the GoM may have agreed to the demand for not treating the online gaming industry as betting or gambling.
The shift in the stance of GoM happened after its meeting on Monday.

According to sources, the GoM has acknowledged the legal differences and nuances of the three and is ready to treat them differently, and has sought representations and legal consultation from various stakeholders on the issue.

Earlier, the GoM was of the view that all three – casinos, online gaming and race course -- should be viewed in the same manner (as a game of chance), and taxed at the highest GST rate of 28 per cent.

The online gaming industry has been opposing this stance of the GoM and has made several representations making the submission online gaming is a game of skills and should not be taxed at the same rate as casinos or race courses. The gaming industry had made representations to consider taxability on online gaming at 18 per cent which is at par with global taxability.

The GoM has been constituted by the GST Council and is headed by Meghalaya chief minister Conrad Sangma. . It has eight members including finance ministers of West Bengal, Telangana, Tamil Nadu, UP and Gujarat. After the change in the stance of the GoM post-Monday meeting, the gaming industry as well as tax experts have welcomed the change in heart of the Group of Ministers on the issue.

Roland Landers, CEO, All India Gaming Federation (AIGF), said in a statement, “GoM recognising the constitutional and legal difference and nuances of online games is very promising.  As an apex industry body for online gaming, AIGF is very hopeful that the GoM will arrive at a progressive and constitutionally sound recommendation for rate and valuation for our industry.”