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The Group of Ministers (GoM) formed by the Ministry of Finance to review the goods and services tax (GST) slab on online gaming, casinos and race courses is set to meet again next week on Tuesday (July 12).

Uttar Pradesh Finance Minister Suresh Kumar Khanna, who is also a member of the GoM, spoke about the team’s next meeting while speaking at a conference on GST organised by the Federation of Indian Chambers of Commerce & Industry (FICCI).

Last month, the GST Council had deferred the decision on imposing 28% GST on casinos, online gaming, and lottery, and asked the GoM, formed under the orders of the Council, to submit a report on the issue after 15 days.

A decision on changing the tax slab on online gaming and other related categories has been pending since earlier this year. In April, the online gaming industry opposed the GST council’s proposal to levy a GST of 30% on entry fee, along with a 115% surcharge, and advocated for levying tax only on Gross Gaming Revenue (GGR). The industry also raised concerns about hiking the GST rate to 28% from the existing 18%. 

The panel of ministers under the GST Council met in May and unanimously agreed on imposing 28% GST on gross gaming revenue and not on per transaction or on every betting amount. 

In the case of casinos, the GoM decided to levy the tax on the amount paid while purchasing chips and not on every betting transaction.

However, a final decision on the issue was deferred during the last GST Council meet. Karnataka Chief Minister BS Bommai said that there were issues that needed to be discussed.

Currently, online games involving betting and gambling are the only entities under the 28% GST slab. The commission collected by online gaming platforms for games that do not involve betting or gambling are taxed at a rate of 18%. 

As per a 2021 KPMG report, online gamers in India grew to about 400 Mn by mid-2020 from about 250 Mn in 2018, making the country the second-largest base of online gamers after China.

Another recent report by FICCI and EY gave a similar market picture, saying Indian online gamers grew 8% to 390 million in 2021 from 360 Mn in 2020. The online gaming segment in India reached INR 101 Bn in 2021 with a 28% growth, the report said.