India: online gaming tax on GST Council’s June agenda

The GST Council may discuss online gaming tax rates at its next meeting.

India.- The Goods and Services Tax (GST) Council is expected to provide clarity on tax rates for online gaming during its upcoming meeting, which is likely to be held next month. A finance ministry official said a council meeting will probably be held in June as state elections will be over by then.

The council will take up the report of the Group of Ministers (GoM) on online gaming, horse racing, and casinos. The report was not addressed at the 49th meeting of the council in February as chairman Conrad Sangma could not attend due to the elections in Meghalaya.

There is currently no consensus on how to tax online games and whether they should be considered games of skill or games of chance. At present, online skill gaming is taxed at 18 per cent of the gross gaming revenue (GGR), while betting and gambling are taxed at 28 per cent on full amounts. 

Reports suggested the GoM was in favour of applying 28 per cent GST but could not reach a consensus. Some fear an increase in taxes could encourage players to choose illegal gambling websites that do not deduct taxes.

Stakeholders were also concerned that applying 28 per cent GST on GGR would lead to a significant increase in tax, with a potential impact as high as 1,100 per cent on the business and 300 per cent on gamers.