GST Council decides to levy a 28% GST on Online gaming, Check Details

GST Council decides to levy a 28% GST on Online gaming. The Gaming Industry is not happy with the council’s decision and asks to reconsider

New Delhi, July 11, 2023, The GST Council of India Decided to impose 28% GST on online gaming, casinos, and horse racing at full value at its 50th meeting. However, the date is not specified to roll out 28% GST. According to Finance Minister Sitharaman, the GST Council has agreed that online gaming, casinos, and horse racing will be taxed at a rate of 28 percent at the entry point on the entire face of bets.

The Gaming Industry is not happy with the council’s decision and asks it to reconsider. The decision will affect the industry very badly. The 28% tax on online gaming is very high, and it will kill all the gaming companies and affect the overall growth of the industry.

Mentioned below is a statement from Mr. Roland Landers, CEO, The All India Gaming Federation.

“We believe this decision by the GST Council is unconstitutional, irrational, and egregious. The decision ignores over 60 years of settled legal jurisprudence and lumps online skill gaming with gambling activities. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses, and the only people benefiting from this will be anti-national illegal offshore platforms.
It is very unfortunate that when the Central Government has been supporting the industry in terms of online gaming rules, clarity on TDS, etc., such a legally untenable decision has been taken, ignoring the views of most GoM states that studied this matter in detail. We hope that the Government will reconsider this recommendation and not implement it, as it will be catastrophic for the 1 trillion dollar digit economy dream of the Hon’ble PM.”

During the meeting, the Council took note of the report submitted by the Group of Ministers (GoM). The report was submitted in June 2022 but was given more time to revisit the final tax rate suggestion. The GST Council’s report recommended a tax rate of 28% of the consideration along with the introduction of a contest entry fee.

This additional tax on entry fees has disappointed many online gaming firms. They consider it not in line with international practices and expect the decision to hurt many smaller startups in this industry.

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