GST Council to decide on how to tax online gaming

The council will decide whether tax will be levied on the entry-level or on each wager.

India.- Revenue secretary Sanjay Malhotra says the GST Council will decide whether the 28 per cent Goods and Services Tax (GST) rate on online gaming will be applied at the entry-level or on each individual bet. 

The council has decided on a 28 per cent tax on the full face value gaming, horse racing and casinos, not gross gaming revenue (GGR) or platform fee. However, it didn’t clarify how ‘face value’ would be interpreted.

According to Indian Express, Malhotra said the final call on tax implementation lies with the GST Council. Meetings with industry representatives and federations have taken place to address their concerns, aiming to find a solution acceptable to all stakeholders.

Initially, it was understood that the framework for implementation would be determined by the rules issued by the finance ministry. On July 11, the GST Council resolved to impose a uniform 28 per cent tax on the full face value of online gaming, casinos, and horse racing.

However, on Monday (July 24), the minister of State for Electronics and IT Rajeev Chandrasekhar clarified that there was no disagreement between the Finance Ministry and the IT Ministry regarding the government’s approach to online gaming. He mentioned that the IT Ministry plans to present a framework for permissible online games and will then approach the GST Council to reconsider the tax decision.

Global and domestic investors, including Tiger Global, Peak XV, and Steadview Capital, had previously written to the Prime Minister expressing concerns about the 28 per cent GST on online gaming.