- The 47th GST Council Meeting reconsidered the taxation of casinos, horse racing, and online gaming, and the Group of Ministers (GoM) was convened to decide whether to impose a 28% GST on the face value of bets, gross gaming revenue, or just platform fees.
- The 50th Meeting of GST Council was conducted on July 11, 2023, to decide whether the tax should be levied on gross gaming revenue or fees charged by the platform or on the full face value of bets put in by players of online games.
- All three activities, namely casinos, horse racing, and online gaming, will be taxed at a uniform rate of 28%, and tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of bets placed with bookmaker/totalisator in the case of horse racing and on full value bets placed in the case of online gaming.
- The effective date for 28% GST levy is yet to be notified by the government.
- The decision has been met with mixed views from various states and industry experts, with some opposing the move due to its potential impact on revenue generation and investments.
- However, government officials cite concerns about addiction to online gaming, and thus the move is perceived as a ‘de-addiction measure’.
- Currently, the GST regime differentiates online games based on skill and chance, with games of chance subject to higher rates of tax. The actual impact of the decision can only be ascertained once 28% GST is implemented.
Source Mondaq
