New Delhi: The Goods and Services Tax (GST) Council, in its 50th meeting on Tuesday, 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.
The meeting also clarified the rate for food and beverages sold inside multiplexes and the definition of all utility vehicles to bring parity for cess levy.
Finance Minister Nirmala Sitharaman said the intent was not to end any industry linked to online gaming, casinos and horse-racing but there was discussion on the moral question of whether these should be taxed at the same rate as essential items.
The tax would be levied on the full value of bets or the full value of consideration paid.
Sitharaman said the GST Council’s decision focused on the taxation part of online gaming and it will align with the regulation of the Ministry of Electronics and Information Technology (MeitY). She said the tax on online gaming companies would be imposed without making any differentiation based on whether the games required skill or were based on chance, and that there will be an amendment in the GST law to tweak the definition of actionable claim.
For the sub-judice cases related to online gaming, Revenue Secretary Sanjay Malhotra said the government will continue to fight those cases in courts. “28% tax was always the case in online gaming. Today’s decision is only to clarify it and put an end to that debate,” he said.
Online gaming companies, however, said the decision will hit the industry as it will affect gaming volumes and the viability of gaming companies.
The GST Council also exempted GST on the import of cancer drug Dinutuximab, medicines used to treat rare diseases, and food used in Food for Special Medical Purposes (FSMP), along with satellite launch services provided by private operators.
Food and beverages consumed in cinema halls will attract a GST of 5%, equivalent to the levy charged in hotels and restaurants, instead of 18%, which was being charged by many cinema halls for composite food packages.
The Council also recommended setting up of a mechanism for appellate tribunals from August 1. Demands for state-wise benches were presented by various states, and the Council approved the setting up of as many as 40 benches in phases.
The definition of utility vehicles has been tweaked to allow the levy of 22% cess over and above the 28% GST rate. The cess will be imposed on any utility vehicles of 1500 cc and above engine capacity, length of 4 metre and above and unladen ground clearance of 170 mm. This definition will, however, not cover sedans.
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