According to reports, the state finance ministers' panel looking to bring online gaming and casinos under GST failed to reach a consensus today and decided to finalise its report by next month.

At present, the current rate of GST on this sector of online skill gaming industry is 18% on the Gross Gaming Revenue (GGR) and 0% on Contest Entry Fee (CEF).

The GST council has been mulling to increase the tax on online gaming to 28%.

The report is expected to be taken up for discussion in the GST Council meeting scheduled to be held in Madurai in August.

The panel felt that further deliberations were required on the matter and fixed 10 August as the date for finalising its report.

In June, the council, comprising the Centre and state finance ministers, referred back the report that was submitted by the GoM for further discussions.

The GoM, under Meghalaya Chief Minister Conrad Sangma, in its report had highlighted that horse racing, online gaming and casinos are all part of betting and gambling, and 28% GST on gross sales value should be levied.

The GoM has also recommended that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by the player for participating in the game.

In the case of racecourses, the GoM had suggested that GST be levied on the full value of bets pooled in the totalisators and placed with the bookmakers.

Regarding casinos, the GoM had recommended that the tax would be levied on the full face value of the chips/coins purchased from the casino by a player. No further GST would apply to the value of bets placed in each round of betting, including those placed with winnings in previous rounds.

While the GST Council was deliberating the GoM report in its meeting on 29 June, Goa Industries Minister Mauvin Godinho highlighted that there was a need for greater detailing and understanding why casinos require a different treatment in taxation compared to horse racing and online gaming.

Subsequently, the GoM was to finalise its report by 15 July.

The other state ministers in the eight-member GoM include Uttar Pradesh finance minister Suresh Khanna, Gujarat finance minister Kanubhai Patel, Tamil Nadu finance minister P Thiaga Rajan and Telangana finance minister T Harish Rao.

Meanwhile, industry body IAMAI has said that the highest GST rate of 28% is meant for things that are considered "sinful consumption", and equating games of skill with gambling, betting and wagering will be against the spirit of Supreme Court judgement.

The Internet and Mobile Association of India (IAMAI) has appealed to the government to maintain the status quo on the online games of skill industry at 18% as imposition of a 28% tax on gross gaming revenue will lead to increase of tax incidence to 55%.