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28% GST on online gaming: GST Council agrees to review after 6 months of implementation Gaming

28% GST on online gaming: GST Council agrees to review after 6 months of implementation

India Blooms News Service | @indiablooms | 03 Aug 2023, 12:28 am

New Delhi: Finance Minister Nirmala Sitharaman on Wednesday announced the decision to implement 28% GST on the full face value of bets placed on online games, horse racing, and casinos.

It will be implemented from October 1. There would be a review of the levy after six months of its implementation, she added.

The video-conference meeting on August 2 was convened shortly after the council's decision on July 11 to impose a 28 percent tax on the total amount paid by users for online games in a uniform manner, without distinguishing between games of skill and games of chance.

The GST Council in its last meeting had recommended that the actionable claims applied in casinos, horse racing and online gaming may be taxed at the rate of 28% on full face value, irrespective of whether the activities are a game of skill or chance.

The Council had also recommended that the law may be amended to provide clarity in the matter.

The GST Council chaired by Union Finance Minister Nirmala Sitharaman on Wednesday approved amendments in the GST laws to provide clarity on the taxation of supplies in casinos, horse racing, and online gaming.

The Council in its meeting today also recommended inserting a specific provision in IGST Act, 2017 to provide for liability to pay GST on suppliers located outside India supplying online money gaming to a person in India.

The Council approved GST on the valuation of the supply of online gaming and actionable claims in casinos at the entry-level.

Sitharaman said that during the meeting, Delhi sought a review of the decision on online gaming.

She said that Sikkim and Goa though were in favour of higher GST but felt that the decision would hurt them.

"Delhi wanted the (decision) on online gaming to go to Group of Ministers (GoM) and therefore dissenting. Goa and Sikkim wanted a higher tax, yes, but on the GGR (gross gaming revenue) possibly whilst the Council had taken in the last meeting that it should be on face value. ...only with respect to casinos that is Goa and Sikkim and therefore the decision to amend CGST had these dissenting voices," Sitharaman said.

She said that because Goa and Sikkim kept appealing on casinos saying they are small states and therefore need to be given consideration, the Council agreed today to come back after six months to review the way in which this is getting implemented.

"When I say six months it's not six months beginning today. It begins from after when this gets implemented. Six months of implementation will hopefully give us some inputs and also we can share our experiences to see how it is going on," the Minister clarified.

(With UNI inputs)