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Group of Ministers set up to Evaluate GST Related to Casinos, Race course; Convened By Nitin Patel

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A seven-member panel of state ministers to examine valuationThe Finance Ministry has set up a 7-member Group of States’ Ministers (GoM) to better understand, examine, and resolve the uncertainty over the valuation of services by casinos, race courses, and online gaming companies for levying Goods and Services Tax (GST).

The Committee will be Convened by Deputy Chief Minister of Gujarat, Nitin Patel.

Key points:

i.Other 6 members:

  • Ajit Pawar (Deputy Chief Minister of Maharashtra)
  • Chowna Mein (Deputy Chief Minister of Arunachal Pradesh)
  • P Thiagarajan (Finance Minister of Tamil Nadu)
  • Amit Mitra (Finance Minister of West Bengal)
  • B Bommai (Home Minister of Karnataka)
  • M Godinho (Transport Minister of Goa)

ii.The GoM will submit the recommendation within 6 months to the GST Council, chaired by the Union Finance Minister and comprising state Finance Ministers for its consideration.

Terms of Reference for Committee of GoM:

i.The committee will evaluate the services provided by casinos, race courses, online gaming portals, and the taxability of certain transactions in a casino. It will also include the existing legal provisions and orders of Courts into evaluation.

ii.Suggestions regarding the requirement of any change on the legal provisions for better valuation of these services (casinos, race course and online gaming) will be provided by it.

iii.Will examine the administration of valuation provisions and suggest alternative means of the valuation if needed. It will also evaluate the impact on other services like the lottery.

Provisions and rates:

i.As per the Schedule III of Central Goods and Services Tax (CGST) Act, GST will not apply (Exempt from levy of GST) to them which are neither ‘supply of goods’ nor ‘supply of services. It includes actionable claims other than lottery, gambling and betting.

ii.Actionable claims can be enforced to GST only by legal action or a suit.

iii.Currently, services of casinos, horse racing and online gaming which are not involved in betting attract 18 percent GST and online games involving betting or gambling attract 28 percent GST.

Recent Related News:

According to a notification by the Central Board of Indirect Taxes & Customs (CBIC), Government is set to mandate Electronic-invoicing (e-invoicing) under the Goods and Services Tax (GST) regime for business entities with a turnover of INR 50 Crore & more from April 1, 2021 (start of next financial year) for business to business transactions.

About GST Council:

i.GST Council is an apex member committee to modify or to procure any law or regulation based on the context of GST in India.

ii.It was constituted on 15th September 2016 under Article 279A of the Constitution.

iii.The council is headed by the union finance minister (Current- Nirmala Sitharaman) and assisted by the finance minister of all the states of India.