The Union Cabinet has approved the bill to amend the GST rate to 28% on online gaming, casinos, and horse racing in India. The bill will be presented in the ongoing monsoon Parliament Session and is expected to be enforced by October 1.
The GST council, in a recent meeting, decided to levy 28% GST on the full face value for the mentioned activities. This decision was met with some concerns and requests for clarity from the online gaming industry, which argued that the new tax could negatively impact their operations.
The Union Revenue Secretary clarified that the GST would be applied to online real money games (RMG) and that the method of taxation on the full face value was not initially clear. A subsequent meeting of the GST council on August 2 clarified that the tax would be levied on the initial deposit amount by players.
Although some states, including Delhi, Goa, and Sikkim, expressed reservations about the 28% tax rate, the majority of states supported the GST on full face value, citing concerns about taxing gross gaming revenue (GGR) at a lower rate than essential household items.
Union Finance Minister Nirmala Sitharaman acknowledged these concerns and stated that the decision would be revisited after six months of implementation to assess the situation's adaptability. This indicates that the government is open to reevaluating the tax rate and its impact on the industry.
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