Today's meeting is crucial for those who are into the online gaming business. In the previous meeting, the GST Council decided to levy a uniform 28% tax on full face value for online gaming, casinos, and horse racing. Subsequently, the big online gaming companies and their CEOs have continued to request the government to revoke the decision as it may hamper the growth of the new-age startups.

Therefore, on Wednesday, the Group of Ministers will discuss and take a final call on the proposal to levy 28% GST on online gaming, casinos, and horse racing.

GST on online gaming

On 11 July, the GST Council approved levying a 28% tax on the full face value of bets in online gaming, casinos, and horse racing.

Subsequently, the Law Committee, comprising Centre and state tax officers, has prepared draft rules for consideration by the GST Council with regard to the computation of supply value for tax purposes.

The committee has suggested the insertion of a new rule under which the value of supply of online gaming would be the total amount deposited with the online gaming platforms by way of money or virtual digital assets on behalf of the player.

With respect to casinos, the committee has proposed that the supply value would be the amount paid by a player for the purchase of tokens, chips, coins, or tickets.

The council will discuss the committee's recommendations in a virtual meeting on Wednesday.

The All India Gaming Federation (AIGF), which represents companies like Nazara, GamesKraft, Zupee, and Winzo, had termed the decision by the GST Council as "unconstitutional, irrational, and egregious".

Gamers from Tier II and Tier III cities under the aegis of 'Indian Gamers United' in a letter to Sitharaman have said that high taxation will push the gamers towards illegal and offshore platforms where no tax is payable but will put the gamers into a very high risk.

The association also pitched for making a distinction between games of chance like gambling and games of skill like gaming.

Gaming is a skill-based activity and cannot be clubbed together with games of luck like gambling and horse racing so taxation requires a relook and making it tax-friendly, 'Indian Gamers United' said in a statement.

51st GST Council meeting: Key expectations

The Council is likely to approve a clear definition of actionable claims

The GST Council may also include online money gaming in the definition of online gaming.

GST Council is likely to define online gaming as those offered on the internet or e-network, including money gaming'.

GST Council may insert a definition of "virtual digital asset" in GST Law as defined under IT Act.