The online gaming industry has welcomed Finance Minister Nirmala Sitharaman’s recent comments that the 28% GST would be levied prospectively on casinos, online gaming and horse racing and not on a retrospective basis.
“A clarification on that levy was issued and according to that 28% is the tax. Whom it will apply to and on whom will the incidence fall has been clearly explained. But, about this particular point on valuation rules, I would like to put on record that the valuation rules to exclude winnings are prospective,” the finance minister had said in Lok Sabha on December 19, while replying to a discussion on the GST (Second Amendment) Bill.
In effect, this means that the new valuation norms came into effect from October 1 under which the 28% GST would be levied on entry-level bets on online gaming platforms and not on what players pay in each game from the winning amount.
Experts said the clarification by the finance minister will help the industry but it is unclear whether it will have any impact on the tax notices and ongoing litigation.
Shilpy Chaturvedi, Partner, Deloitte India said, “The industry which is facing the unique business challenges on account of GST will be looking at the courts for the final view on the interpretation on the valuation for past period. The industry is positively looking forward to the review by GST Council after 6 months of implementation of the levy.”
Read more at: Business Today
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