The Central Government has set up a panel of the state ministers for better valuation of the services of online gaming portals, casinos, and race courses for levying the Goods and Services Tax (GST).
The 7-member panel which is convened by the Deputy Chief Minister of Gujarat Nitin Patel will also be examining whether any change is required in the legal provision for the better means of valuation of these services.
The panel formed by the government will be submitting its report to the GST Council which will be chaired by the Union Finance Minister and the comprising State Finance Ministers, within 6 months.
Currently, the services of horse racing, casinos, and online gaming attract 18% GST. The Group of Ministers will decide on the method of valuing the services.
Who will be the members of the Group of Ministers (GoM)?
Apart from the Deputy CM of Gujarat, the other members of the Group of Ministers include West Bengal Finance Minister Amit Mitra, Deputy CM of Maharashtra Ajit Pawar, Deputy CM of Arunachal Pradesh Chowna Mein, Home Minister of Karnataka Basavaraj Bommai, Goa Transport Minister Mauvin Godinho, and Finance Minister of Tamil Nadu P Thiagarajan.
What will be the Objective of the panel?
• The Group of Ministers (GoM) will be examining the issue of valuation of services provided by the race courses, casinos, and online gaming portals. The taxability of certain transactions in a casino will also be checked with reference to the current legal provisions and the orders of the court.
• The panel of the state ministers will also examine the administration of such valuation provisions and in case, an alternative means of valuation has been recommended.
• The Group of Ministers will look into the impact of such valuation on other similarly placed services such as the lottery.
Online gaming sector sees a flow of investment in a pandemic:
Rajat Mohan, AMRG and Associated Senior Partner said that in the pandemic, the online gaming sector, including Casino, has seen huge user traction and flow of investments.
He added that the online gaming companies in India are in the nascent stages, leading to multiple unresolved issues around taxation and valuation which pose a big challenge to the entire industry.
The Group of Ministers have been constituted to examine, understand and resolve the uncertainty that surrounds the valuation of services by race courses, casinos, and online gaming companies.