Taxation: GST law panel defines game of chance and game of skill

Nov 2, 2022 | GST FAQ, News | 0 comments

Taxation: GST law panel defines the game of chance and the game of skill


The Law Committee under the Goods and Services Tax (GST) Council thinks that a clear definition and classification of the terms “game of chance” and “game of skill” is a must before taking a decision on the taxation of online gaming and betting, the Economic Times reported

The law panel has informed the group of Ministers (GoM) that a clear definition will clear confusion and reduce the scope for multiple litigations, the report said.

Earlier in September, representatives from the Gaming industry met officials from the finance ministry to make a case for why a ‘game of skill’ should be taxed differently. The gaming industry claims that online games of skills were protected under Articles 19(1) (g) and 301 of the Constitution.

Currently, the GoM, headed by Meghalaya chief minister Conrad Sangma, is considering the imposition of GST on online gaming, horse racing and casinos. The GoM may also consider the longstanding issue of differential treatment between the game of skill and the game of chance.

According to the report, the law committee has suggested that the GoM may either wait for a detailed framework from the Centre on the classification or rework its interim report providing a clear classification before submitting the final report to the GST Council.

Many courts have overlapping definitions and it will be better if there is a uniform framework for this, the law committee has told the GoM.

At present, GST at 18 per cent is levied on casinos, horse racing and online games where no betting or gambling is involved. The rate for online games involving betting or gambling is at 28 per cent.

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