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A panel of states' finance ministers is likely to submit their report on taxation of casinos and online gaming to FM Nirmala Sitharaman in a day or two, as per a report by PTI news agency.

At present, the current rate of GST on this sector of the online skill gaming industry is 18% on the Gross Gaming Revenue (GGR) and 0% on Contest Entry Fee (CEF).

The GST Council has been mulling increasing the tax on online gaming to 28%.

The GST Council is likely to meet towards the end of this month or next month. The GoM, under Meghalaya Chief Minister Conrad Sangma, had in an earlier report proposed to the GST Council to levy 28% GST on gross sales value as horse racing, online gaming, and casinos are akin to betting or gambling.

However, since Goa wanted further discussions with regard to casinos, the GST Council, comprising the Union finance minister and her state counterparts, suggested that the GoM hold further discussions and submit a final report by July 15.

Now the Group of ministers will be submitting their reports to the finance minister in a day or two. The ministers also met industry stakeholders late last month to hear their concerns.

In the report submitted to the Council last month, the Group of Ministers recommended that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by a player for participating in the game.

Regarding casinos, the GoM had recommended that the tax should be levied on the full face value of the chips/coins purchased from a casino by a player.

The GoM added that there will not be GST on the value of bets placed in each round of betting, including those placed with winnings in previous rounds.

The finance ministers in the eight-member GoM include Suresh Khanna (Uttar Pradesh), Kanubhai Patel (Gujarat), P Thiaga Rajan (Tamil Nadu), and T Harish Rao (Telangana).

Meanwhile, industry body the Internet and Mobile Association of India (IAMAI) has said that the highest GST rate of 28% is meant for things that are considered "sinful consumption", and equating games of skill with gambling, betting and wagering will be against the spirit of Supreme Court judgement.

The IAMAI has appealed to the government to maintain the status quo on the online games of skill industry at 18% as the imposition of a 28% tax on gross gaming revenue will lead to an increase of tax incidence to 55%.

(With PTI inputs)

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