India

India’s Goods and Services Tax Council will meet for a second day on Wednesday, with a plan to hike the tax for all online gambling and racing to 28 percent on the table.

The recommendation of the Group of Ministers, who had been studying India’s GST regime, was to impose 28 percent on the contest entry fee for online gaming, the initial purchase of chips for casinos and the face value of bets for race courses. 

However, an industry insider said all efforts are being made to urge the government to reconsider this proposal and not to approve it at Wednesday’s meeting.

They are concerned that such a high flat fee on the face value of bets will significantly curb growth in the nascent online gambling industry. 

The horse racing industry is already required to pay the 28 percent levy on total wagers and has said its pools had become unattractive as a result and had led to a boom in illegal gambling. 

The Turf Authority of India has been lobbying for payment of the tax only on the commission, or service fee, retained by the race club.

The GST Council set up a seven-member panel of ministers from different states almost a year ago to examine how to value and tax services provided by India’s gambling industry.

The AIGF had argued for an 18 percent rate based on the platform fee.