GST Council may push for stricter online gaming curbs

NEW DELHI: The Goods and Services Tax (GST) Council is likely to propose a block on online gaming services that do not comply with Indian tax laws, people aware of discussions likely to be on the table at the next meeting on Wednesday said, amid rising concerns over the use of digital services for money laundering and tax evasion

- Rajeev Jayaswal

The GST Council, made up of all state finance ministers and headed by the Union finance minister, on July 11 levied a 28% tax rate on online gaming, which officials said was done since the activity was treated as a luxury, and not essential, thereby earning the highest slab.

Concerns have been raised that online gaming platforms may evade GST by operating from overseas. But, in such cases administration will deduct GST from payment sources, one official said. "The 28% GST on face value of bets, instead of gross gaming revenue (GGR), makes tax administration very simple. Tax can be deducted from payment sources in case of an overseas platforms," he said. GST on GGR value-total bets minus total wins-will complicate the system. "It is difficult to monitor, particularly in cases of overseas players, and prone to manipulations," he added.

On Wednesday, the Council will consider necessary changes in laws to enforce its July 11 decisions, the second official said.