Parliament approved amendments to the Central and Integrated GST laws on Friday to levy a 28 per cent tax on the full face value of bets in online gaming, casinos, and horse racing clubs.
The Central GST (Amendment) Bill, 2023, and the Integrated GST (Amendment) Bill, 2023, piloted by Finance Minister Nirmala Sitharaman, also make registration mandatory for offshore e-gaming companies operating in India. It also provides for blocking access in case offshore platforms fail to comply with GST registration and tax payment norms.
The CGST amendment bill defines ‘online gaming’ as a game on the internet or an electronic network.
‘Online money gaming’ means online gaming in which players pay or deposit money, including virtual digital assets (VDAs), in the expectation of winning money or VDAs, in any event, including a game, scheme, competition, or any other activity, whether or not its outcome or performance is based on skill, chance, or both.
With the amendment to the GST law, horse racing, casinos, and online money gaming will be treated as actionable claims similar to lottery, betting, and gambling.
Sources said casual online gaming, which does not involve money or any consideration, will not be taxable under GST.
The amendments will aid in combating money laundering, illegal income, black money, and other illegal activities associated with online gaming and curbing evasion, they added.
The bill was approved by both Houses of Parliament without any discussion.
With the passage of the CGST and IGST amendments, states will now have to effect similar changes in their state GST laws in their respective assemblies.
