Online Gaming: 28% GST on online gaming: FM Nirmala Sitharaman issues clarification

Finance Minister Nirmala Sitharaman has issued a clarification on Goods and Services Tax (GST) on online gaming at the GST Council meeting. In the meet, which was held via videoconferencing, she said that the taxes are applicable on online gaming on total funds deposited to play online games and not on every bet.

Furthermore, she clarified that tax for online gaming and casinos will be imposed at the entry level and not on each bet placed.

The clarification may come as slight relief to those who were unhappy with the decision taken last month to levy a uniform 28% tax on full face value for online gaming, casinos and horse racing.28% GST on online gaming from October 1
The GST is expected to be implemented from October 1. A review of the same will be done after six months, she said during a press conference after the 51st GST Council meeting.
“It (28% GST on online gaming and casinos) is expected to be implemented from 1st October… It is also decided that this decision will be reviewed after six months after it is implemented. When I say six months it does not mean starting from today, it begins after when it is implemented,” she said.
The 28% taxation has been in the offing for the gaming companies as the Group of Ministers (GoM) had broadly agreed for the proposed taxes on the said activities in their previous meeting.
There was no consensus as Goa proposed to impose only 18% tax on platform fees. Sitharaman noted that Delhi, Goa and Sikkim have sought a review of the 28% tax on online gaming.
“The council agreed today to come back after six months to review the way in which this (28 per cent GST rates on casinos and online gaming) is getting implemented,” the finance minister added.
At a previous meeting, Sitharaman said that the government’s intention was not to end online gaming, casino and horse racing.
“Our intention is not to end online gaming, casino, horse racing. But all these have become so complex that go this route or go that route, each route has transparency to a certain extent, but after that, it is opaque,” she said.