GST Council to meet on August 2 to discuss gaming tax

The gaming industry has warned that the tax could lead to job losses and a decline in investment.

India.- The Goods and Services Tax (GST) Council will meet on August 2 to reach a final decision on the imposition of a 28 per cent GST levy on online gaming, casinos and horse racing. Despite concerns from industry stakeholders, senior government officials have suggested there will be no backtracking on the proposal.

The implementation framework, as discussed during the previous GST Council meeting, is expected to be formalised in the rules issued by the finance ministry. Subsequently, the Council will seek approval for the legal amendment after obtaining consent from the union finance minister, who serves as the chairperson of the Council.

There have been doubts about whether the tax will be levied on the entry-level or on each wager. While officials have said there will be no revision to the proposed rate, the meeting will seek to resolve this aspect.

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.

According to Indian Express, global and domestic investors, including firms such as Tiger Global, Peak XV (formerly Sequoia Capital India), and Steadview Capital, sent a joint appeal to the Prime Minister urging a review of the GST rate on online gaming. Over a hundred industry associations representing gaming companies, including Dream 11 and Mobile Premier League, issued an open letter to the government voicing concerns that the decision could lead to business shutdowns.