GST Council to Impose 28% Tax on Online Gaming, Casinos and Horse-Racing
The GST Council, in its 50th meeting on Tuesday, decided to levy a uniform 28% tax on full face value for online gaming, casinos and horse-racing. The GST Council’s decision is based on the recommendations of a group of ministers (GoM) that was formed to look into the taxation of online gaming. The GoM had proposed a 28% tax on the entire value of bets and wagers made on online gaming, regardless of whether the games involved skill or chance.
The GST Council’s decision to impose a 28% tax on online gaming is likely to have a significant impact on the industry. The high tax rate could make online gaming more expensive for consumers, and it could also deter businesses from investing in the sector.
The decision was met with mixed reactions from industry stakeholders, with some expressing concerns that it would stifle the growth of the online gaming sector. The Indian Gaming Federation (IGF) said that the 28% tax rate would be “devastating” for the industry, and it called on the government to reconsider its decision.
The Federation of Indian Chambers of Commerce and Industry (FICCI) also expressed concerns about the GST Council’s decision, saying that it would “derail the growth” of the online gaming sector. FICCI said that the government should have differentiated between skill-based and chance-based games, and that it should have imposed a lower tax rate on skill-based games.
The GST Council’s decision to impose a 28% tax on online gaming is a significant development for the industry. It remains to be seen how the industry will respond to the decision, and whether it will have a negative impact on the growth of the sector.
In addition to the 28% tax on online gaming, the GST Council also decided to:
- Reduce the rate for uncooked/ unfried snack pellets from 18% to 5%.
- Exempt cancer medicine and imitation zari thread from GST.
- Clarify the rate for food and beverages sold inside multiplexes.
- Define all utility vehicles to bring parity for cess levy.
The GST Council’s decisions will come into effect from July 18, 2023.
