Amendment for online gaming, casinos, horse racing not retrospective, just clarificatory: Revenue Secretary
July 13, 2023
GST rates on online gaming, casinos, and horse racing were always 28% and 28% were always on the face value: Revenue Secretary Sanjay Malhotra
Revenue Secretary Sanjay Malhotra, on Wednesday, clarified that the amendment to include online gaming, casinos, or horse racing in the list of actionable claims of GST Law will not be retrospective. In an interview with businessline, he also said that ongoing investigations into these matters by Income Tax Department and GST Department will continue.
“So far as we are concerned, GST rates on online gaming, casinos, and horse racing were always 28 per cent and 28 per cent were always on the face value. So, the question of the retrospective amendment does not arise because this amendment is only in the nature of clarification,” Malhotra said.
On Tuesday, GST Council recommended online gaming, casinos, and horse racing to be taxed at the uniform rate of 28 per cent on full face value. Tax will be applicable on the face value of the chips purchased in the case of casinos, bets placed with bookmaker/totalisator in the case of horse racing, and bets placed in case of the online gaming. GST will be applicable at the time of making payment for purchase of chips or placing a bet.
It was also said that the appropriate amendment to this effect will be made in GST law. Malhotra said that the amendment is only to remove any doubt or ambiguity as to whether games based on chance or on skill, when played with stakes, are actionable claims amounting to betting and, therefore, taxable at 28 per cent.
“The amendment will include online gaming, casinos, and horse racing in the list of actionable claims, which at present has lottery, betting, and gambling. Even though they were earlier covered as betting or gambling but if there is any doubt as to whether they constitute betting or gambling, the very fact that we have included them so that they get taxed as actionable claims,” he said.
There have been litigations as online gaming platforms were charging GST at the rate of 18 per cent, while tax official pressed for 28 per cent. The disputes reached courts and in one particular matter, the Karnataka High Court ruled in favour of an online gaming company. Now, the government has decided to approach the higher court.
“We are filing an SLP in the Supreme Court. What happens in that case will be determined by the Supreme Court but we are sure that in future at least, it will not be subject to any interpretation. That’s our effort. Still, if the courts or someone else interprets it some other way, then we will fight it out,” he said.
[The Hindu Business Line]
