The committee, headed by Meghalaya Chief Minister Conrad Sangma, which met on Monday, contacted the legal committee on the legal aspect of such differential treatment, officials familiar with the deliberations told ET.
The decision to seek legal advice comes after online gambling companies cited various court orders that distinguished games of skill from games of chance.
The GoM previously decided to recommend a 28% GST levy on gross gaming revenue for online gambling. He has now asked for more time to submit his final recommendations.
“The issue is not about the levy, but about the legality of clubbing games of chance and games of skill together as bets,” an official said. “Therefore, legal advice is essential before final submission to avoid any litigation in the future.”
Gambling industry representatives met with Treasury Department officials last month, discussing why a game of skill should be taxed differently. The industry has argued that online games of skill are protected by Section 19(1)(g) and Section 301 of the Constitution.
Some of the GoM members pointed out that the differential rate could lead to new disputes, as there is no standard definition of a game of skill, the official said.
The GST Council wants the report by September 10, another official said, adding that the decision will depend on legal clarity on the issue. The GoM was due to submit its report on August 10, but had taken an extension.
“Chaired a GoM meeting on casinos, racetracks and online gambling in New Delhi,” Sangma said in a tweet after the meeting.