GST Council discusses report on online gaming tax and false registration
The GST Council, during its meeting in August 2023, clarified that online gaming platforms will have to pay 28 percent tax.
According to sources, the GST Council is likely to deliberate on the status report on online gambling taxation, and progress in the fight against fake goods and services tax registrations during its meeting next week.
The Council will also approve the notifications to give effect to the amendments in the GST Act, which were part of the Finance Act, 2024.
The Council, chaired by the Minister of Finance and composed of state representatives, will also discuss the report of two groups of ministers at its 54th meeting on 9 September: one on tariff rationalisation and the other on real estate.
With regard to online gaming, the tax officials of the Centre and the state will submit a “status report” to the GST Council. The report would include GST revenues from the online gaming sector before and after October 1, 2023.
From 1 October 2023, entry-level bets on online gaming platforms and casinos will be subject to 28 percent GST. Before this, many online gaming companies did not pay 28 percent GST, as there were different tax rates for games of skill and games of chance.
The GST Council, in its meeting held in August 2023, clarified that online gaming platforms will have to pay 28 percent tax. Subsequently, the central GST law was amended to make the tax provision clearer.
Offshore gaming platforms also had to register with the GST authorities and pay taxes, otherwise the government would block the sites.
The Council then decided that the tax on the online gaming sector would be reviewed six months after its introduction.
Sources indicate that the Council will consider the status of taxation in the sector and that tax rates are unlikely to be changed.
In addition, the Council is likely to be apprised of the ongoing campaign against false registration, the success of the campaign and the action taken against such entities. The total amount of suspected GST evasion would also be presented to the Council.
The campaign will run from August 16, 2024 to October 15, 2024 and is aimed at identifying suspicious/fake GSTINs and carrying out necessary verifications and further corrective actions to weed out these fake invoicers.
During the first campaign against false registrations between May 16, 2023 and July 15, 2023, it was discovered that a total of 21,791 entities (11,392 entities under state tax jurisdiction and 10,399 entities under CBIC jurisdiction) with GST registration did not exist.
During the special drive, an amount of Rs 24,010 crore (State – Rs 8,805 crore + Centre – Rs 15,205 crore) in suspected tax evasion was detected.
The Council would also approve notifications, including that of the amnesty scheme, announced in the last Council meeting. The various amendments to the GST Act decided by the Council in its previous meeting on June 22 were passed by Parliament last month through the Finance Act, 2024.
At the Council meeting in June, a number of taxpayer-friendly measures were taken, including waiving interest and penalties for notices issued in the first three years of the GST (2017-18, 2018-19 and 2019-20), provided the full tax demanded is paid by March 31, 2025.
In order to curb the number of cases, the Council has fixed a financial limit for tax officials to file appeals in the GST Appellate Tribunal, the High Court and the Supreme Court. This limit is Rs 20 lakh, Rs 1 crore and Rs 2 crore respectively.
It was also recommended to reduce the amount of deposit that taxpayers are required to make while filing appeals under the Goods and Services Tax (GST).
In addition, the two State governments dealing with rationalisation of GST rates and the real estate sector will submit a report to the Council for deliberation.
The commission dealing with rate rationalisation is likely to propose adjustments to the tax on certain goods, but suggests keeping the rates at 5, 12, 18 and 28 percent for the time being.
(Only the headline and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First publication: 02 Sep 2024 | 19:33 IST