GST Council Meet: GoM Decides to Levy 28% GST on Online Gaming, Horse Racing, Casinos

New Delhi: The 50th Goods and Services Tax (GST) Council meeting on Tuesday decided to levy a 28% GST on full face value on online gaming, horse racing, and casinos. Changes will be made in the GST law to state that these three supplies are not actionable claims, like that of lottery and betting.

The report of the panel of eight state finance ministers, convened by Meghalaya Chief Minister Conrad Sangma, on taxation of online gaming, and horse racing was discussed at the meeting in New Delhi. The GoM (group of ministers) had a broad agreement that a 28% GST should be levied on all three supplies, but a consensus eluded on the taxability of online games with Goa suggesting that an 18% tax should be levied only on platform fees and contribution to prize pool should be tax exempt.

The GST Council is chaired by the Union Finance Minister and comprises ministers from every state and Union Territory.

Impact on the gaming industry

Ankur Gupta, Practice Leader (Indirect Tax), SW India said, “Ignoring the long-time demand of the gaming industry, levying a 28% tax rate on the gaming industry will be a big setback for the Indian players. We will need to see the fine print of notification if any exceptions are created. We might immediately see notices being issued to the gaming players for differential tax and with this new series of litigation.”

What does this mean for you?

If you are a gamer, you will now have to pay 28% GST on the full face value of your bets. This means that if you bet ₹100, you will have to pay ₹28 GST.

The GST Council has also decided to do away with the distinction of game of skill and chance in case of online gaming. This means that all online games, regardless of whether they are skill-based or chance-based, will be taxed at 28%.

What are the next steps?

The GST Council will now need to notify the changes to the GST law. Once the notification is issued, the new tax rates will come into effect.