GST council to discuss report on online gaming taxation, fake registration

The GST Council in its meeting next week is likely to deliberate upon the status report on taxation of online gaming, in addition to the progress of the drive against fake Goods and Services Tax registration, sources said.

The Council will also clear the notifications to give effect to the amendments in GST law, which were part of the Finance Act, 2024.

The Council, which is chaired by the Union Finance Minister and comprises state counterparts, in its 54th meeting on September 9 will also discuss the report of two Group of Ministers (GoM) -- one on rate rationalisation and the other on real estate.

With regard to online gaming, centre and state tax officers will present a "status report" before the GST Council. The report would include GST revenue collection from the online gaming sector before and after October 1, 2023.

From October 1, 2023, entry-level bets placed on online gaming platforms and casinos were subject to 28 per cent GST. Prior to that, many online gaming companies were not paying 28 per cent GST arguing that there were differential tax rates for games of skill and games of chance.

The GST Council in its meeting in August 2023 had clarified that online gaming platforms were required to pay 28 per cent tax and subsequently Central GST law was amended to make the taxation provision clear.

Offshore gaming platforms were also mandated to register with GST authorities and pay taxes, failing which the government would block those sites.

The Council had then decided that the taxation on online gaming sector would be reviewed after six months of its implementation.

Sources said that the Council would deliberate on the status of taxation on the sector and any change in tax rates is unlikely.

Besides, the Council is likely to be apprised about the ongoing drive against fake registration, the success of the drive and action taken against such entities. The total amount of suspected GST evasion would also be presented before the Council.

The drive, from August 16, 2024, to October 15, 2024, is aimed at detecting suspicious/ fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers.

In the first drive between May 16, 2023, to July 15, 2023, against fake registration, a total of 21,791 entities (11,392 entities pertaining to state tax jurisdiction and 10,399 entities pertaining to CBIC jurisdiction) having GST registration were discovered to be non-existent.

An amount of Rs 24,010 crore (state - Rs 8,805 crore + Centre - Rs 15,205 crore) of suspected tax evasion was detected during the special drive.

Also, the Council would approve notifications, including that of the amnesty scheme, announced in the last Council meeting. The various amendments to GST law decided by the Council in its previous meeting on June 22 were passed by Parliament last month vide Finance Act, 2024.

The Council in June meeting took a host of taxpayer-friendly measures including waiver of interest and penalty for demand notices issued in the first three years of GST -- 2017-18, 2018-19 and 2019-20, if the full tax demanded is paid by March 31, 2025.

To reduce litigation, a monetary limit for tax officers to file appeals before the GST Appellate Tribunal, the High Court and the Supreme Court at Rs 20 lakh, Rs 1 crore and Rs 2 crore, respectively was fixed by the Council.

It also recommended a reduction of the quantum of pre-deposit required to be paid by taxpayers for filing of appeals under Goods and Services Tax (GST).

Besides, the two GoMs on GST rate rationalisation and real estate will present a report before the Council for deliberation.

The rate rationalisation panel is likely to propose tweaks in the taxation of some goods but suggests retaining the slabs at 5, 12, 18 and 28 per cent, for now.