The Goods and Service Tax Council has constituted a group of ministers (GoM) to examine whether any change in legal provisions is required for valuation of services provided by online gaming, race courses and casinos.
To this end, the Council has set four-point terms of reference for the GoM which will include examining the taxability of certain transactions in casinos related to present legal provisions and orders of Courts. Impact of similarly placed services, such as lottery, will also be examined by the GoM.
As per an office memorandum issued by the government, the GoM is required to give its recommendations within six months.
Taxation on online games has been a contentious issue. According to a recent Maharashtra Authority of Advance Ruling (AAR) ruling, online games are classifiable under online information and data-based access or retrieval services under GST, which is taxable even if the cloud is located outside India. However, contention is open on whether recent games like Dream 11 that offer fantasy sports gaming services qualify as a game of skill or gambling.