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The Group of Ministers (GoM), formed by the Finance Ministry to review the goods and services tax (GST) rate for online gaming, casino, and horse racing, will reportedly submit its final report on the issue before the second week of August.

The GoM met on Tuesday (July 12) to discuss the issue, but did not take any final decision due to absence of certain members and information in the meeting, Business Today reported quoting sources.

The panel of ministers will meet again in the last week of July, it said.

Last month during the GST Council meeting, the decision on levying 28% GST on casinos, online gaming, and lottery was deferred. The GoM led by Meghalaya Chief Minister Conrad Sangma was given another 15 days to work on the issues.

The GST council last year constituted the GoM to examine the issue of valuation of services provided by casinos, race courses and online gaming, as well as to examine whether any change is required in the legal provisions to adopt any better means of valuation of these services.

The panel had recommended levying a GST of 28%.

Currently, a tax rate of 18% is levied on the commission collected by online gaming platforms for games not involving betting or gambling, whereas it is nil for contest entry fee (CEF). 

The online gaming industry raised several concerns regarding the hike in tax rate. Moreover, there were concerns around not having a proper distinction between skill-based gaming and real-money gaming.

Considerably, the Internet and Mobile Association of India (IAMAI) also appealed to the government and the GST Council to not change the tax rate for online skill-based games. The IAMAI said that the 18% tax slab is legal, fair and in line with international taxation standards for the sector. 

“It would be against the letter and spirit of the Supreme Court’s judgement to equate games of skill with games of chance – gambling, betting or wagering,” it added.

Growing at a 28% rate, the online gaming segment in the country reached INR 101 Bn in 2021, according to a FICCI-EY report. More importantly, real-money gaming comprised over 70% of segment revenues.