Gaming sector classification: Games of skill or chance?

By christopher heyes

In my time working in the Indian gaming sector, there has always been one key question which surfaces again and again, is this a game of skill or chance. There are many interpretations of this as has been highlighted in our recent gaming reports and numerous court cases in India with overlapping views.

It is no surprise then that after delaying a decision on valuation and incidence of GST on gaming by the Group of Ministers’ several times, advice now received from the law committee of the Good and Services Tax Council has stated that the definition of what is tantamount to gaming needs to be cleared up at central level in order for them to make a decision on the valuation and incidence of GST on gaming.

This is likely to mean a significant additional delay in their recommendations, as they wait for a detailed central framework and definitions, or they rework the interim report and make these classifications themselves.  As the Ministry of Electronics and Information Technology (MeitY) is already working on a framework it is our view that the GoM is unlikely to want to supersede this or add to an already complicated mater.

Currently GST is levied on casinos, horse racing and online games. Where no betting or gambling is involved, GST stands at 18% and 28% where it is. Our report and previous reports have always called for much clearer definitions to remove the need for lengthy and costly litigation cases, a standard framework (which we are pleased to say is now in train) as well as ensuring that GST is levied on the gross gaming revenue i.e. the total takings less the pay-outs to the winners rather that taking the total stakes bringing India more inline with global practises and allowing regulated companies to offer competitive odds.

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