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 GST Council: 28% Tax on Online Gaming, Casinos and Horse-Racing


The Goods and Services Tax (GST) Council, in its 50th meeting, decided to levy a uniform 28% tax on full face value for online gaming, casinos and horse-racing, while reducing the rate for uncooked/ unfried snack pellets, cancer medicine and imitation zari thread.


GS III: Indian Economy

Dimensions of the Article:

  1. About GST Council
  2. Decisions Taken at the 50th GST Council Meeting

About GST Council

  • Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
  • As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
  • The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2016, for the introduction of Goods and Services Tax in the country was introduced in the Parliament and passed by Rajya Sabha on 3rd August 2016 and by Lok Sabha on 8th August 2016.
  • GST Council is an apex member committee to modify, reconcile or procure any law or regulation based on the context of goods and services tax in India.
  • The GST council is responsible for any revision or enactment of rule or any rate changes of the goods and services in India.
  • The council contains the following members:
    • Union Finance Minister (as chairperson)
    • Union Minister of States in charge of revenue or finance (as members)
    • The ministers of states in charge of finance or taxation or other ministers as nominated by each state’s government (as members).
Matters on which GST Council makes recommendations
  • Taxes, cesses, and surcharges levied by the Centre, States and local bodies which may be subsumed in the GST;
  • Goods and services which may be subjected to or exempted from GST;
  • Model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply;
  • Threshold limit of turnover below which goods and services may be exempted from GST;
  • Rates including floor rates with bands of GST;
  • Special rates to raise additional resources during any natural calamity;
  • Special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand;
  • Any other matter relating to the goods and services tax, as the Council may decide.

Decisions Taken at the 50th GST Council Meeting:

Levy 28% GST on Online Gaming, Horse Racing, Casinos:
  • No Distinction: The council agreed that there should be no differentiation between games of skill and games of chance for taxation purposes.
  • Online Gaming Tax: The proposal for 28% GST on online gaming faced opposition, as Goa suggested a lower tax rate of 18% on platform fees.
  • Concerns of Online Gaming Companies: Online gaming companies argue that a 28% GST rate will hinder their ability to develop new games and technologies and impact their competitiveness.
Reduced GST on Food and Beverages in Cinema Halls:
  • Previous Tax Rates: Movie tickets below Rs 100 were taxed at 12%, while tickets above this threshold attracted 18% GST.
  • Composite Supply: The entire supply, including tickets and eatables, will be treated as a composite supply and taxed at the applicable rate of the principal supply, which is the cinema ticket.
  • Revised Tax Rate: Restaurants inside cineplexes will now attract a 5% GST rate instead of the previous 18%.
Exemptions and Clarity on Taxation:
  • Import of Cancer Drug Exemption: GST exemption was granted for the import of cancer drug Dinutuximab.
  • Exemption for Food for Special Medical Purposes: GST exemption was also announced for Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases.
  • Definition of Utility Vehicles: Clarity was provided on the definition of utility vehicles, and norms for registration were tightened.
  • Compensation Cess for MUVs: A 22% compensation cess will be levied on Multi Utility Vehicles (MUVs), while Sedans were not included in the list.
Setting up Appellate Tribunal:
  • Establishment of Appellate Tribunal: The council decided to set up an appellate tribunal to address the requests from states for benches. No request for a bench will be denied.

-Source: The Hindu

December 2023