GST council sets 28% tax on entry-level bets for online gaming analyse

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The GST Council has eased the online gaming industry’s tax worries, agreeing to a 28% GST levy on the face value of entry-level bets placed on gaming platforms and casinos, despite dissent from Delhi, Goa, and Sikkim. Offshore gaming platforms must register with GST authorities and pay taxes, or risk being blocked under the Information Technology Act.
Amendments to the Central GST law are to be made in the current monsoon Parliament session, after which states will ratify the changes in their respective assemblies.
The revised provisions, specifically defining various aspects of online gaming, will be effective from October 1.
GST will be calculated based on the amount paid at the time of game entry, rather than on subsequent in-game payments from winnings, stated finance minister Nirmala Sitharaman. For instance, if a player bets Rs 1,000 and wins Rs 300, then places a bet of Rs 1,300, GST will not apply to the winnings.
The decision will be reviewed in April 2024, six months after its implementation, by the GST Council for potential adjustments.
Despite objections from Goa and Sikkim over casino-related amendments, and Delhi’s opposition to online gaming amendments, revenue secretary Sanjay Malhotra stated the decision was nearly unanimous.
Malhotra assured that a DG GST intelligence officers cell is being established to monitor and act against digital services evading tax payment, including online gaming platforms.
The move is seen as a measure to bring clarity to taxing online gaming and casinos. The GST Council’s decision is viewed as explanatory, as online gaming was already seen as an actionable claim liable to 28% GST.
In a joint statement, E Gaming Federation (EGF) and Federation of Indian Fantasy Sports (FIFS) praised the move as addressing industry concerns over repeat taxation.