Union Finance Minister Nirmala Sitharaman announced that a 28% GST (Goods and Services Tax) on online gaming is expected to take effect from October 1, 2023.

Review After 6 Months

During the GST Council meeting, states like Delhi, Goa, Andhra Pradesh, and Sikkim raised concerns about the tax. As a result, the Council has agreed to review the decision six months after implementing the tax.

Impacts and Exclusions

The GST will be imposed on online gaming and casinos at the entry level, not on each bet placed. The Council previously approved a 28% tax on the full face value of bets in online gaming, casinos, and horse racing.

Computation of Supply Value

The Law Committee, comprising Centre and state tax officers, has proposed draft rules for determining the supply value for tax purposes. For online gaming, the value of supply would be the total amount deposited with the gaming platforms on behalf of the player. For casinos, it would be the amount paid for tokens, chips, coins, or tickets.

Industry Response

The All India Gaming Federation (AIGF), representing companies like Nazara, GamesKraft, Zupee, and Winzo, has criticized the decision by the GST Council, considering it “unconstitutional, irrational, and egregious.”

Article Source: The Times of India

Inputs: PTI (Press Trust of India)