GST council meeting: GST council meeting on online gaming today, final decision on levying 28 percent tax
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GST council meeting: GST Council meeting is being held today. This meeting is considered important in many respects. It is being told that in the meeting, a final decision will be taken on the implementation of 28 percent GST on online gaming, casino and horse racing. Also, it is possible to discuss the modalities on its implementation. Earlier Union Finance Minister Nirmala Sitharaman (Nirmala SitaramanIn the meeting of the GST Council chaired by GST on July 11, it was decided to tax the entire amount of transactions in online gaming, casino and horse racing at the rate of 28 percent. The Law Committee of the Central and State tax authorities has now prepared draft rules for the consideration of the GST Council with regard to computation of supply value for tax purposes.
Council will present many suggestions
According to sources, the committee has suggested adding a new rule. Under this, the supply price in online gaming shall be the total amount deposited by the concerned entity with the online gaming platform by way of money or digital assets. In relation to casinos, the committee has proposed that the supply price would be the amount paid to buy tokens, chips, coins or tickets from the entity concerned. The council will consider the recommendations of the committee in an online meeting on Wednesday. Meanwhile, how will the GST authorities tax online gaming companies operating from abroad? On this, Minister of State for Finance Pankaj Chowdhary said that there are enough provisions in the GST laws to take action against such forums that default in paying taxes.
Adequate enforcement provisions in law to deal with GST evasion by foreign gaming platforms: Govt
The Finance Ministry on Tuesday said that there are adequate provisions in the GST (Goods and Services Tax) Act to take action against foreign gaming platforms that default on paying taxes. The GST Council, in its meeting on July 11, decided to tax the entire amount of transactions in online gaming, casino and horse racing at the rate of 28 per cent. Minister of State for Finance Pankaj Chowdhary informed Rajya Sabha that some representations have been received from stakeholders. It added that the Council’s decision to levy GST at the rate of 28 per cent would prompt online gaming platforms to relocate to foreign locations. In a written reply to a question, Choudhary said that adequate legal provisions exist to take action against foreign forums that do not pay the prescribed GST.
Online gaming body urged to reduce GST to 28 per cent
An association of online gaming companies on Tuesday requested Finance Minister Nirmala Sitharaman to reduce the 28 percent Goods and Services Tax (GST). The industry body said that this tax is very high and it will encourage gaming companies to operate illegally. In an open letter to Sitharaman, gaming companies from medium and small towns (Tier-2 and Tier-3) under the banner of ‘Indian Gamers United’ said that high taxation would encourage illegal gaming and foreign platforms. The government will not get any tax from these, but legitimate gaming companies will be in big trouble. The body also advocated for a distinction to be made between games of luck such as gambling and games of skill such as gaming. ‘Indian Gamers United’ said in a statement that gaming is a skill-based activity and cannot be mixed with games of chance like gambling or horse racing. He advocated re-thinking taxation and making it industry-friendly.
GST will not be applicable on services provided in the personal capacity of director: Finance Ministry
The Finance Ministry on Tuesday said that companies will not be required to deduct GST under the reverse charge mechanism (RCM) on services provided by directors of companies in their personal capacity. The ministry issued a clarification in a circular saying that only services provided by a director in his official capacity would attract GST under RCM. Under the RCM system, GST has to be deducted at the time of payment to the firm receiving the services. After the GST Council meeting held on July 11, confusion had arisen regarding the taxability of services provided by directors in their personal capacity.
Exemption will apply to the official position of the director
The Finance Ministry said that a demand was being made to clarify the status of services provided by a director of a company or body in his personal capacity, such as letting property to a company, to be taxed under the RCM. He said that only the services rendered in the official capacity of the director would come under the ambit of RCM. Rajat Mohan, senior partner, AMRG & Associates, said the Finance Ministry has not fully clarified the position regarding the personal status of the director and the personal services rendered by him in this circular. Mohan said that unless the CBIC (Central Board of Indirect Taxes and Customs) lays down clear rules for the classification of ‘directory services’, taxation on other directorial services like bank guarantees, advisory services, training services and planning services would be at the discretion of the industry. will remain an unexplored area.
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