GST on casino bets pits Goa against Uttar Pradesh
Mauvin Godinho, the state's representative at the GST council meeting, said Goa had sought a 28 per cent tax be levied on "Gross Gaming Revenue" and not on the full face value of bets or full value of consideration paid.
4 min read
oa has six off-shore casinos operating on vessels stationed in Mandovi river and ten on-shore casinos.(Express Photo: Neeraj Priyadarshi/File) Stating that the GST Council’s decision to levy a uniform 28% tax on “full face value” for online gaming, casinos and horse-racing will be a “negative factor” for the industry, hamper fresh investment and lead to decline in footfall at casinos, Goa Transport Minister Mauvin Godinho on Wednesday said a consensus could not be reached at the Council meeting due to opposition from Uttar Pradesh.
Godinho, who represented Goa at the Council’s meeting, said the state had sought a 28% tax to be levied on “gross gaming revenue” (GGR), and not on the full face value of bets, or full value of consideration paid. Stating that Goa’s stand is “very clear”, he said, “Everyone in the industry — casinos, online gaming or horse-racing — wanted the entire calculation to be done on gross gaming revenue (GGR) for the purposes of taxation…(at) 28%…there was no dispute. But, they [Council] decided on the full face value.”
GGR is the total amount of money a gambling business brings in through bets, deducting the amount that is paid for the win.
“I feel it is going to be a very negative factor for the industry and hamper fresh investment. It will hamper the existing industry, (as) footfall is bound to decrease,” he said.
Godinho said that at one stage during the GST Council meeting, it appeared that a consensus had “almost been reached”, but “all of a sudden” the minister from Uttar Pradesh opposed it. “That’s how they decided on the full face value as well as on 28% (tax). With TDS also coming in, it is not going to be very positive for the industry.”
Godinho said the state will write to the Union Finance Minister to reconsider the decision.
“The Chief Minister (Pramod Sawant) said he will take it up. It will ultimately go for reconsideration to the (GST) Council — it has to go,” the minister said. “If there is a representation from our government — and it will be there — I have told the Chief Minister to write to the Finance Minister as well as others. I think other representations from other industries are bound to come.”
Why the sector matters for Goa
Goa has six offshore casinos operating on vessels stationed on Mandovi river and 10 land-based casinos operating from major hotels. Over the years, the casino industry has become popular among tourists visiting the coastal state. Besides being a source of employment, the industry is also a big revenue-earner, with the annual turnover of each offshore casino estimated to be at least Rs 100 crore to Rs 150 crore.
The GST Council’s decision has evoked a mixed response from casino operators in Goa, with some terming the move “illogical” while others said they are waiting for clarification from the state government on how the tax would be levied in practice.
Srinivas Nayak, director of Casino Pride Group, among the largest casino chains in Goa, said: “We are still awaiting clarity on how the tax will be calculated — whether it will be levied while returning chips at casinos. There are concerns that if the tax is levied on full face value, and not on GGR, it would almost mean shutting down operations. But there is still no clarity.”
A senior official of another offshore casino in Goa said the decision is “illogical” and not in the best interest of stakeholders of the gambling industry. “The tax should be levied on gross gaming revenue,” the official said. “Eventually, the additional tax burden will be passed on to the people and the players. This would facilitate more illegal gambling operations, and in the long run could potentially result in job cuts across casino and allied industries.”
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