Basing the GST rate for online skill-gaming on the overall pool of money wagered by the players instead of the platform fee doesn’t make sense from a revenue perspective in the long run
Online skill gaming is judicially categorised as a legitimate business activity and works on a platform fee model, whereby a fee is charged to facilitate the playing of these skill-based games amongst actual players. By Malay K Shukla
The Group of Ministers (GoM) on Casinos, Race Courses and Online Gaming convened for the first meeting earlier in the month to deliberate upon the rate and modality of Goods and Service Tax (GST) to be levied on these industries. Members of the GoM have since stated through various external interactions that there have been advanced discussions on both the key aspects of their recommendation, and it is likely that they will arrive at a consensus when they reconvene next week.
While this is a somewhat vast array of industries, one specific group that has been on tenterhooks is members of the sunrise sector of online skill gaming that offers a set of games such as rummy, poker, chess, fantasy sports, etc, that require a preponderance of skill, and are therefore not betting or gambling.
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Online skill gaming is judicially categorised as a legitimate business activity and works on a platform fee model, whereby a fee is charged to facilitate the playing of these skill-based games amongst actual players. This fee ranges 10-20% of the total face value or wager amount, utilised by the platforms to provide a secure and credible gaming ecosystem to these players.
Since the inception of the GST regime, the supply of services made by games of skill conducted online is classifiable under entry 998439, ‘Other online content nowhere else classified’. Under this classification, these platforms have thus far been paying GST at 18% on Gross Gaming Revenue (GGR), or […]
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