The Goods and Services Tax (GST) Council, in its 50th meeting on July 11, decided to levy a uniform 28 per cent tax on full face value for online gaming, casinos and horse-racing.
Key points
- The online gaming companies have raised concerns about the impact of this move on the industry, as it is likely to affect volumes and thus the viability of gaming companies.
- The uniform levy of 28 per cent tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker/totalisator in the case of horse racing, and on the full value of the bets placed in case of online gaming.
- The government will bring in amendments to the GST-related laws to include online gaming and horse racing in Schedule III as taxable actionable claims.
- In the context of GST, an actionable claim is defined as goods under the Central Goods and Services Tax Act, 2017.
- So far, lottery, betting, and gambling were classified as actionable claims. Now, horse racing and online gaming will be added.
- Union Finance Minister Nirmala Sitharaman, who heads the GST Council, said the intent was not to end any industry but rather a “moral question” about taxing both gaming at the same rate as other essential items.
- In April, the IT Ministry had notified rules for online gaming intermediaries, allowing for the creation of self regulatory bodies that will decide what is a permissible online game.
