The Goods and Services Tax (GST) committee in India has failed to reach an agreement on the newly suggested 28% gambling tax. This tax would be applicable to land-based and online gambling facilities. Read on below to see why the council cannot come to a cohesive agreement.
The council is undecided on whether to implement the tax rise due to foreign companies. One side of the council thinks the country should go ahead and implement the gambling tax rise of 28% for all local gambling businesses.
On the other side of the party, however, people are arguing that this will kill local business opportunities based on foreign tax. Their argument highlights the fact that most online gambling companies operate out of so-called tax haven countries. These give operators a massive tax break.
That side of the party, therefore, argues that it will jeopardize Indian business growth. The Indian gambling companies will not be able to compete with the foreign companies solely because they won't be able to afford to. However, this is not the only disagreement afoot.
Certain casino games can be divided into either games of skill or games of chance. Buying a lottery ticket, for example, is purely a game of chance. On the other hand, playing poker requires a certain level of skill and know-how from the player.
The council asked the GST task force to differentiate between what India would class as games of skill and games of chance. The council has failed to do so and instead insists on charging a blanket rise of 28% to all gambling activities. Therefore, they cannot come to an agreement as to what should be taxed and not.
The biggest thing that needs to happen is consensus. The GST committee needs to come to an agreement on the tax rise, whether it will affect the economy in a negative or positive way, and exactly which games the rise will apply to.
Until then, they will remain at loggerheads. The council most recently met on the 17th of December. At that virtual meeting, online gambling was not addressed. This means the jury is still out on what to do with gambling tax.