50th GST Council Meet: Big blow to online gaming industry; here's what else gets cheaper & costlier

Key decisions were taken on a slew of proposals at the 50th GST council meet that was held on Tuesday. While certain items and services will get cheaper, others are set to be costlier.

28% GST on Gaming Industry

In a decision that the online gaming industry calls a "catastrophic blow" the GST council has agreed to levy a 28% uniform tax on online gaming, horse racing and casinos on the full-face value of bets. The decision also makes no distinction between games of skill and games of chance.

Meanwhile, Finance Minister Nirmala Sitharaman has assured that council's intention was not to hurt the gaming industry or states with casinos.

"The GST Council’s intention is not to hurt the online gaming industry or states with casinos. A few states shared their concerns. But there is a moral question: can we encourage them more than essential goods? So I am proud to say that the GST Council discussed and understood the matter deeply and took a decision which had been pending for 2-3 years. The issue is very complex," Finance Minister Sitharaman said.

However, the online gaming industry stakeholders feel otherwise. CEO of All India Gaming Federation Roland Landers said, "We believe this decision by the GST Council is unconstitutional, irrational, and egregious. The decision ignores over 60 years of settled legal jurisprudence and lumps online gaming with gambling activities".

He went on to say that this will lead to anti-national illegal offshore platforms.

Amrit Kiran Singh, chief strategy advisor to the founders of the skill-gaming firm Gameskraft, said the move "negates all the good work" that the government has done to support the industry. Meanwhile, Director-General of Federation of Indian Fantasy Sports Joy Bhattacharjya has also called it a “disappointing” decision.

Exemption for medicine for cancer, rare diseases

The Group of Ministers (GoM) has decided to exempt GST on import of cancer drug Dinutuximab, and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases. Now, the drug attracts 12% GST

Food in theatres to cost less

The council reduced the GST on restaurants in Cineplex from 18% to 5%.

"It has been decided to clarify that supply of food and beverages in cinema halls is taxable as restaurant service as long as (a) they are supplied by way of or as part of a service and (b) supplied independently of the cinema exhibition service," according to a finance ministry statement.

The GoM also mentioned that if cinema tickets and eatables (popcorn, drinks) are sold together the entire supply should be treated as composite supply and taxed as per the applicable rate of the principal supply, which in this case is cinema ticket.

SUVs to become costlier

The government increased the cess for the SUVs by 200 basis points from the current 20% to 22%. The cess rate will be applicable if the vehicle meets any of the following three specifications.

1. Unladen (without passenger weight) ground clearance of 170mm. Earlier, the condition was on laden basis

2. Length more than 4 meter

3. Over 1500cc engine capacity

This also includes multi-purpose vehicles (MPV).