Since it is now clear that the Goods and Services Tax that would be introduced in April 2017 and will subsume all gaming, betting and lottery taxes, the All India Gaming Federation (AIGF) has filed a representation with the GST Council to provide for a standard or low rate to tax the gaming, skill gaming, betting and casino industries. AIGF has further requested that the GST Council formulate special rules for valuation for certain peculiar transactions pertaining to the industry.
AIGF CEO Roland Landers said, “The transactions of the gaming industry are very different from the regular business transactions and thus require special attention and consideration. If the provisions of the model GST law are applied as it is to the gaming transactions it will be against the very essence of the concept of GST, i.e. to tax the value addition and would cause genuine hardship to the operators in the industry”.
He added, “The transactions in the casino business should not be taxed at a rate higher than the standard rate considering the social contribution which they make by generating employment, state revenues for social welfare activities etc. Also, such practice will be in line with the global practices where gaming transactions are either taxed at a standard rate of GST, or are exempt from GST/VAT and other taxes.”
In consideration to the international standards being followed in countries like Australia, United Kingdom and Malaysia, the federation has demanded special rule formulation for determining valuation, so that only the net retention i.e. the value addition in the transaction is taxed and not the gross value is charged to tax under the GST regime.
Also, the representation demands for clarification by GST Council on certain aspects such as determining the place of supply of such transactions (in case of online gaming transactions), allowing input credit for such businesses etc. to reduce the scope of different interpretation & avoid any future litigation.