ECONOMY

Decision on levying tax on casinos, lottery & GST compensation to States deferred

The GST Council on Wednesday deferred a decision on levying a 28 per cent tax on casinos, online gaming, horse racing and lottery, pending more consultations with stakeholders. Further, no decision was taken on extending the mechanism to compensate States for the revenue lost from the implementation of GST beyond June 30. 

A two-day meeting of the panel considered a report of the GoM but deferred a decision as Goa and some others wanted to make more submissions. The GoM had recommended that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by the player on participating in the game. 

In cases of race courses, it had suggested that GST be levied on the full value of bets pooled in the totalisators and placed with the bookmakers. It had also recommended that no distinction should be made on grounds of game of skill or game of chance for the purpose of the levy of GST and should be taxed at the highest rate of 28 per cent. 

Briefing reporters about deliberations at the two-day meeting of the GST Council, Finance Minister Nirmala Sitharaman said finance and other ministers of 16 States had spoken on the compensation issue. Of the 16 States, three to four of them had spoken of evolving their own revenue stream to break from the compensation mechanism. The Centre did not reveal its mind on the issue. 

On the first day of the meet on Tuesday, the GST Council had accepted most of the recommendations of the GoM on GST rate rationalisation. Accordingly, GST of 5 per cent will be levied on pre-packaged and labelled curd, lassi (butter milk), puffed rice and wheat flour. Besides, a 12 per cent tax on hotel rooms below Rs 1,000 per day will be levied as against tax-exempt earlier.

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