GST Council Meet: 28% Tax Imposed On Online Gaming On Full Face Value

The GST council has also approved setting up appellate tribunals.

Most countries worldwide levy a tax on the online gaming industry.

The Goods and Services Tax (GST) Council, which is the body that decides on GST rates on Tuesday announced levying a 28 per cent tax on online gaming, casinos and horse racing would and that the tax would be levied on full face value. Union Finance Minister Nirmala Sitharaman made the announcement at the council's 50th meeting in New Delhi.

According to Sudhir Mungantiwar, Maharashtra's forest cultural and fisheries minister, the body has decided to do away with the distinction of "game of skill" and chance in the case of online gaming. Twenty-eight per cent tax would be levied on the full face value of bets, the minister said. The GST council has also approved setting up appellate tribunals. The minister said that changes will be made in the GST law to state that these three supplies are not actionable claims, like that of lottery and betting, reported news agency PTI.

With the growing penetration of 5G and the increasing use of handheld devices, the online gaming industry is expected to grow rapidly in the next half a decade. The online gaming sector is fast growing at $3 billion with more than 400 million users. Most countries worldwide levy a tax on the online gaming industry. The tax levied is more or less at par with the current taxability of 18 per cent. However, for online gaming firms in India, the taxability moves to 28 per cent. The move is being seen as a setback for online gaming companies as some say this will discourage the development of the online gaming industry in the country.

The decision to levy GST on online gaming has also been welcomed by some, says a report by Business Today. Those who have welcomed the announcement are of the view that it will help to level the playing field between online gaming companies and traditional gaming firms.