Game of Skill or Chance? GST Law Panel for Clear Definition

The Law Committee under the Goods and Services Tax Council is of the view that a clear definition and classification of the “game of chance” and “game of skill” is a must before deciding on the taxation of online gaming and betting.

Absence of a clear definition will lead to more confusion and open the gate for multiple litigations, it has informed a group of ministers (GoM) that has sought the committee’s views on the legal aspect of GST on the sector, people aware of the discussions said.

The GoM, headed by Meghalaya chief minister Conrad Sangma, is looking into the GST on online gaming, horse racing and casinos, including the possibility for differential treatment between the game of skill and the game of chance.

The law committee has suggested that the GoM either wait for the Centre’s detailed framework on the classification or rework its interim report with a clear classification before submitting the final report to the GST Council.

“The committee has suggested that there is no clear definition between the game of skill and game of chance and the GoM has to first rework on the report with clear definition and classification,” a person privy to the discussions said.

Many courts have overlapping definitions and it will be better if there is a uniform framework for this, the law committee has told the GoM.

Since the Ministry of Electronics and In-formation Technology is already working on the framework, the law committee has suggested that the GoM could wait for it.

Currently, GST at 18% is levied on casinos, horse racing and online games where no betting or gambling is involved. The rate is 28% for online games involving betting or

Gaming industry representatives met officials from the finance ministry in September, making a case for why a game of skill should be taxed differently. The industry has argued that online games of skills were protected under Articles 19(1) (g) and 301 of the Constitution. S-ET

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