Can act against offshore gaming platforms evading taxes: Govt

New Delhi, August 1

There are sufficient enforcement provisions in GST laws to take action against offshore gaming platforms which default in paying taxes, the government said in a written reply in the Lok Sabha on Tuesday.

The reply came in the context of the government receiving some representations from stakeholders that GST Council’s decision will prompt online gaming platforms to shift to offshore locations. It comes a day before the GST Council will meet in virtual mode to decide on the manner in which the supply value will be determined for levying GST. The GST Council had on July 11 decided that online gaming is an actionable claim, like the lottery, on which a 28 per cent tax is to be levied.

It is proposed that the value of the supply of online gaming will be the total amount paid/deposited on behalf of the player. The council will also consider the case of casinos where the value of supply will be the total amount paid by the player for the purchase of tokens, chips, coins or tickets.Meanwhile, the Online Gamers’ Association has requested Finance Minister Nirmala Sitharaman for reduction of the 28 per cent GST, saying it would lead to mushrooming of illegal gaming firms.

Gamers from tier II and tier III cities, under the banner of the Indian Gamers United, also said high taxation would push gamers towards illegal and offshore platforms where no tax is payable. “It put the gamers into a very high risk,” they said.

The group also wanted the government to make a distinction between games of chance like gambling and games of skill like gaming. “Gaming is a skill-based activity and cannot be clubbed together with games of luck like gambling and horse-racing. Taxation requires a relook,” it said in a statement.

GST Council’s decision

• On July 11, the GST Council had decided that “online gaming is an actionable claim, like the lottery, on which 28 per cent tax is to be levied”
• The council is set to meet in a virtual mode to decide on the manner in which the supply value will be determined for levying GST