{"id":34560,"date":"2022-11-24T11:10:06","date_gmt":"2022-11-24T05:40:06","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=34560"},"modified":"2025-04-20T15:06:05","modified_gmt":"2025-04-20T09:36:05","slug":"gst-on-online-gaming-casinos-racing-issues-in-the-debate","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/gst-on-online-gaming-casinos-racing-issues-in-the-debate\/","title":{"rendered":"GST on Online Gaming, Casinos, Racing: Issues in the Debate"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>The online gaming in India \u2013 Type, market size<\/strong><\/li>\n<li><strong>News Summary<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why In News?<\/strong><\/h2>\n<ul>\n<li>The ministerial panel formed for casinos, race courses and online gaming under the Goods and Services Tax (GST) regime is likely to reiterate its earlier stance of a uniform 28 per cent tax rate for the three categories.\n<ul>\n<li>Currently, online gaming\u00a0<u>platforms pay 18 per cent GST on platform fee alone<\/u>, and not on the full value including prize money.<\/li>\n<\/ul>\n<\/li>\n<li>The final call about the valuation mechanism, however, will be taken by the GST Council.<\/li>\n<li>This is due to the fact that the panel members have differed on whether it should be levied on the platform fee or the entire amount paid by the participants.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>The online gaming market in India:<\/strong><\/h2>\n<h3><strong>Types:<\/strong><\/h3>\n<ul>\n<li><strong>e-Sports:<\/strong>\u00a0These are video games that were played privately or on consoles in video game stores in the 1990s, but are currently played online in a structured manner between professional players, either individually or in teams.<\/li>\n<li><strong>Fantasy sports:<\/strong>\u00a0These are games in which the player selects a team of real sports players from several teams and earns points based on how well the players perform in real life.\u00a0<strong>For example,<\/strong><\/li>\n<li><strong>Online casual games:<\/strong>\n<ul>\n<li>These could be\u00a0<strong>skill-based<\/strong>, where the outcome is heavily impacted by mental or or\u00a0<strong>chance-based<\/strong>, where the outcome is heavily influenced by some randomised activity, such as rolling a die.<\/li>\n<li>A game of chance may be considered as gambling if players bet money or anything of monetary value.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>Online gaming market in India<\/strong><\/h3>\n<ul>\n<li>The online gaming industry grew exponentially during the Covid-19 pandemic.<\/li>\n<li>Online gaming currently contributes more than Rs 2,200 crore of GST, as per a recent study by EY and Assocham.<\/li>\n<li>As per a KPMG report, the online gaming sector would grow to Rs 29,000 crore by 2024-25 from Rs 13,600 crore in 2020-21.<\/li>\n<\/ul>\n<h3><strong>Challenges faced by online gaming sector:<\/strong><\/h3>\n<ul>\n<li><strong>Lack of regulatory oversight:<\/strong>\n<ul>\n<li>Online gaming exists in a regulatory grey area and there is no comprehensive legislation\u00a0<u>with respect to its legality or its boundaries.<\/u><\/li>\n<li>Also, there is currently no regulatory framework to govern various aspects of online gaming companies such as &#8211;\n<ul>\n<li>Having a\u00a0<u>grievance redressal mechanism, Protection of data and intellectual property rights, and Prohibiting misleading advertisements.<\/u><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Online gaming is a state subject (Under Entry 34, List II &#8216;Gambling&#8217; and &#8216;Betting&#8217;)<\/strong>:\n<ul>\n<li>However, state governments have stated that it is extremely difficult for them to implement some restrictions, such as geo-blocking specific apps or websites within their state&#8217;s borders.<\/li>\n<li>Also, state governments (unlike the Centre),\u00a0<u>lack the necessary blocking authority to issue blocking orders for offshore betting sites<\/u><strong>.<\/strong><\/li>\n<li>There is also concern that legislation passed in one state may not be relevant in another, resulting in inconsistencies across the country.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Societal concerns:<\/strong>\n<ul>\n<li>A number of reported incidences of persons losing big amounts of money on online games, resulting in\u00a0<strong>suicides\u00a0<\/strong>in various parts of the country.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>News Summary<\/strong><\/h2>\n<h3><strong>Background:<\/strong><\/h3>\n<ul>\n<li>The eight-member ministerial panel headed by Meghalaya Chief Minister Conrad Sangma had earlier submitted a report to the Council which was taken up for discussion in the June meeting.<\/li>\n<li>It had recommended a uniform rate of 28 per cent on casinos, race courses, and online gaming with\u00a0<u>no distinction based on whether an activity is a game of skill or of chance or both<\/u>.\n<ul>\n<li>The GoM had observed that casinos pay full GST of 28 per cent on betting and gambling.<\/li>\n<li>However, the online gaming sector does not pay the same on the ground that online games are actionable claims other than betting and gambling.<\/li>\n<li>Thus, the GoM felt there should be uniformity in taxation.<\/li>\n<\/ul>\n<\/li>\n<li>The GoM also discussed whether these activities should be taxed on Gross Gaming Revenue (GGR) or net value and to come up with a mechanism of arriving at GGR or net value.<\/li>\n<li>However, no consensus was achieved on this issue.<\/li>\n<\/ul>\n<h3><strong>Stand of gaming industries on this issue<\/strong><\/h3>\n<ul>\n<li>The industry has argued that if betting and gambling are taxed on full value, the organizers will have to pay from their pockets.<\/li>\n<li>It has also said that if share of taxes increases in the bet amount, the prize pool amount shrinks, and therefore, winning amounts become smaller.<\/li>\n<li>This in turn may discourage the players that will affect the trade in terms of volumes of trade.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Goods and Services Tax is a Value-Added Tax levied on goods and services sold for domestic consumption.<\/p>\n","protected":false},"author":5,"featured_media":34561,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-34560","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34560","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=34560"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34560\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/34561"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=34560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=34560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=34560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}