A closer look at the 28% GST imposition on online gaming

The GST Council decided to apply the 28% tax on the full-face value of online gaming at the entry level and review it six months after its implementation

In its follow-up video conferencing meeting on Wednesday, the GST Council discussed the issue of imposing a 28% tax on online gaming, horse racing, and casinos. After careful consideration, the council reached a decision to implement this tax from the 1st of October. This move is aimed at regulating the rapidly growing industries involved in online gaming, horse racing, and casinos.

During its 51st meeting, the GST Council decided to apply a 28% tax on full-face value at the entry level. By levying the tax at the entry level, the government aims to capture the entire value of the transactions made when individuals or entities first engage in these activities. Based on the review’s findings, the council may consider making any necessary adjustments or modifications to improve the tax structure and its impact.

Finance Minister Nirmala Sitharaman added that this decision will again be reviewed six months after its implementation to evaluate its working. However, according to reports, she stated, “The council recommended that valuation of supply on online gaming and actionable claims in casinos may be done based on the amount paid or payable or payable to or deposited with the supplier by/or on behalf of the player, excluding the amount entered into the games, bets out of winnings of previous games and not on the total value of each bet placed”.

Overall, the move to tax online gaming, horse racing, and casinos at the entry level while subjecting the implementation to review exhibits a thoughtful and measured approach by the GST Council. With the aim of regulating these taxes, the council underlines the government’s commitment to promoting a robust and efficient tax system that evolves with the changing dynamics of these industries.

Also read: GST Council imposes 28% tax on online gaming