Online Gaming: 28% GST on online gaming: All the key announcements from GST council meeting

The decision to impose a 28% tax on online games, horse trading and casinos stays. This was announced by the finance minister Nirmala Sitharaman at the GST Council‘s meeting on Wednesday, August 2. The council, however, clarified that 28% GST would be levied on full face value and not gross gaming revenue (GGR) or the platform fee. The Centre is likely to bring amendments to the Central GST law in the ongoing monsoon session of Parliament. The 28% GST will come into effect from October.

Key things that the GST Council said
The GST Council has decided that the tax will be applicable on the “amount paid or payable to or deposited with the supplier (of services), by or on behalf of the player (excluding the amount entered into games/bets out of winnings of previous games/bets) and not on the total value of each bet placed”. This rules out the possibility of repetitive taxation as was feared by the industry.

“The valuation may be done based on the amount paid or payable or deposited with the supplier by or on behalf of the player, excluding the amount entered into games bets out of winnings of previous games and bets and not on the total value of each bets placed. Entry (level) whatever they pay to get chips and not what they pay in each game,” the FM said.
Giving an example, she said that if a bet is placed for say Rs 1,000, and the player wins Rs 300, then if the player again places a bet of Rs 1,300, then GST will not be levied on the winning amount.
Review after 6 months
The minister said that a review of the taxation of online gaming and casinos will be undertaken after six months or around April 2024 to see if any change in rules is required.
Foreign gaming platforms
The government also made it clear that offshore gaming platforms will have to register themselves with the GST authorities. In case they do not follow the law, the government will invoke the provisions of the Information Technology Act to block those sites.