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Preparation to impose GST on online games

New Delhi. GST officials at the Center and states are working with experts in the online gaming sector to interpret ‘skill games’ and ‘luck games’ so that both types of Create a separate taxation structure for sports. Sources gave this information.

The tricky issue of imposition of Goods and Services Tax (GST) on online games has been a subject of controversy for over a year now. Several states have demanded a lower tax rate on online games that require skill. He is of the view that games of skill should not be equated with games of luck. In the absence of a clear definition of these games, many times tax notices are sent to online game portals and later legal disputes start.

Sources said that the legislative committee of the GST Council, in its meeting held in Bengaluru on Saturday, discussed the issues related to the definition of ‘games of chance’ and ‘games of skill’ with technical sector experts. In the absence of all the states in the legislative committee, the draft report on the definition will be shared with all the states and their opinion on the same will be sought.

The GST Council will consider the report of the Group of Ministers on taxation on sports like online gaming, casinos and horse racing in a meeting to be held in late December. The GoM had in June suggested that the online gaming sector should be taxed at the rate of 28 per cent.

However, there is demand from the industry that skill games should be taxed at a lower rate as the prize money would have to be reduced due to higher tax rates. At present, GST is levied at the rate of 28 per cent on accidental games.

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