GST Council to meet on Jun 22, may take up review of online gaming taxation

The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet after a gap of eight months on June 22, and is likely to review the implementation of 28% GST on the online gaming sector. The 53rd meeting of the GST Council will be held on 22.06.2024 at New Delhi,” the GST Council Secretariat said n a post on X.

The 52nd meeting of the GST Council, which comprises finance ministers of all states and UTs, was held on 07.10.2023.

The agenda for the 53rd meeting is yet to be circulated amongst the Council members.

This would be the first Council meeting after Lok Sabha electiions.

The GST Council is likely to review the decision to levy 28% GST on full value of bets for online gaming companies which came into effect from 01.10.2023.

In its meeting in July and August, the GST Council had approved amendments to the law to include online gaming, casinos and horse racing as taxable actionable claims, and clarified that such suppliers would attract 28% per cent on full bet value.

At the time it was said that a review of the implementation would be carried out after six months, which is April, 2024.

Since no GST Council meeting has taken place since April, the June 22 meeting of the Council is expected to review the taxation of the online gaming sector.

Another key pending issue before the GST council is rate rationalisation and a panel under Uttar Pradesh Finance Minister Suresh Kumar Khanna has been mandated to suggest required rate rationalization.

The GST Council in its June 22 meeting may decide to fast track the process and set a timeline for the panel to submit a final report.

The GoM on GST rate rationalisation was set up in September 2021 by the GST Council. The panel had submitted an interim report to the GST Council in June 2022, proposing changes in tax rates for some goods and services to rationalise the levy.

The GoM was mandated to suggest required rate rationalisation and correction of inverted duty structure with an objective of simplifying the rate structure, reviewing the GST exemption list and enhancing GST revenues.

Currently, the GST regime has five broad slabs of zero, 5, 12, 18 and 28 per cent. A cess is levied over and above the highest 28 per cent on luxury and demerit goods.

Deloitte India Partner Mahesh Jaising said the expected clarifications on critical matters such as related party free of cost transactions and ESOP taxation are also indicative of policymakers’ efforts to engage with industry stakeholders and streamline procedures based on feedback.

KPMG in India, Partner and Head (Indirect Tax) Abhishek Jain said multiple clarifications are being looked after to including taxability for the online gaming sector before October, taxability of ESOPs, corporate guarantee taxability, and various rate-related clarifications are also anticipated due to recent litigation.

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