India’s GST (Goods & Services Tax) Councils practically rewrote the tax code a few months prior without actually changing anything. It decided to just translate it to the current language and, as a result, online casino operators were suddenly on the hook for hundreds of millions of dollars. The gaming industry has been continuously attempting to ask the GST Councils to lighten up, but they never manage to work anything out. They ask for applicable tax rates to be reduced, or for the GST to change the system of how it calculates taxes, but the council just won’t budge. It has recently been discovered that the Group of Ministers (GoM), though a panel only started earlier in 2019, is going to have to take their place and make the call because the GST Councils can’t make a decision.
What are the issues?
Casino companies like comeon and countless others are frequently trying to address India’s GST Council, which is currently having issues figuring out gambling taxes. There are two main problems – one resides on how taxes on lotteries are collected and the other involves how gambling taxes are calculated. The Maharashtra Finance Minister, Sudhir Mungantiwar, built the GoM panel mainly to review the application process of GST rates on the distribution of lottery tickets. State lotteries pay a tax rate of 12%, but private distributors pay 28%. Some have called the differentiating rates unconstitutional or unfair, but the Calcutta High Court has already stated that existing laws allow the structure, adding, “It is the duty of such Council to interpret the rates of tax.”
The plea by the gaming community for a fair, universal rate fell to nothing when the GST Council met a few weeks ago. Most of the members of the council, including Union Finance Minister Nirmala Sitharaman, voted against the pleas of the operators.
The issue being avoided?
There is also a big argument against the GST Council’s current ideal calculation of the tax code. The council assures that the taxes must be paid on the face value of the bet, which the entire casino industry has said isn’t possible. It appears that the council wants to pass over and have the Group of Ministers(GoM) make the call, instead. Pramod Sawant, the chief minister of Goa, said, “There was some issue on GST on gross revenue, which has now been handed to the Group of Ministers for further discussion. It is for the GST council to decide.”
Conclusion.
In the meantime, the casinos are still without proper regulation and India can’t get a better grasp on its gambling-related finances. There is no clarity on when the Group of Ministers(GoM) might consider making a ruling, or if it will pass on the issue and send it back to the GST Council.
