GST Council confirms 28% gaming tax to start from October 1

The 28 per cent tax on online gaming, casino and horse racing will be levied on the initial deposit.

India.- The Goods and Services Tax (GST) Council has decided to impose a 28 per cent GST levy on online gaming, casinos and horse racing on the initial deposit rather than imposing taxes on each individual game played. The measure will start from October 1.

Finance minister Nirmala Sitharaman said the shift was because taxing gross gaming revenue (GGR) could potentially yield a net tax lower than that generated from essential goods. The council’s latest meeting heard perspectives from different states, with Goa and Sikkim advocating for a GST imposition on GGR instead of the full face value. In contrast, Delhi called for a comprehensive reevaluation, urging further review by the Group of Ministers (GoM).

However, a majority of states expressed alignment with the decision and eagerness to initiate its implementation. A follow-up review is scheduled six months post-implementation. Authorities have announced that they will block non-compliant platforms. The Directorate General of Goods and Services Tax Intelligence (DGGI) will compile a list of violators.

Various online gaming companies have expressed concerns over the potential ramifications of the tax, arguing that it could significantly impact volumes and the overall viability of gaming businesses.