The GST Council on Tuesday announced the decision to impose the highest tax rate of 28% on the total face value of online gaming, casinos, and horse racing bets. However, it also reduced the tax on food and beverages sold in multiplexes and adjusted the classification of utility vehicles for taxation purposes.
Union Finance Minister Nirmala Sitharaman clarified that the move to tax online gaming and casinos was not aimed at destroying the industry. Instead, the decision was grounded in a “moral question” that such activities shouldn’t be taxed at the same rate as essential goods and services. The tax will apply regardless of whether games require skill or are based on chance.
The Council also exempted GST on the import of Dinutuximab, a cancer drug, and on medications used to treat rare diseases and Food for Special Medical Purposes (FSMP). Additionally, private satellite launch services were granted a GST exemption. Multiplex cinema halls, which previously charged an 18% GST on food and beverages, will now only levy a 5% GST. This rate aligns with the levy in hotels and restaurants. The definition of utility vehicles has been adjusted, resulting in a 22% cess, in addition to the 28% GST rate, on utility vehicles with an engine capacity of 1,500 cc and above, length exceeding 4 metres, and unladen ground clearance of 170 mm.