28% Tax On Online Gaming To Be Reviewed 6 Months After Implementation: FM Nirmala Sitharaman

The Finance Minister also mentioned that the value of supply for online gaming and actionable claim in casinos will be calculated at the entry-level.

Finance Minister Nirmala Sitharaman said that the likely date of online gaming GST implementation is October 1. 

Source : Getty

Following the 51st GST Council Meeting Finance Minister Nirmala Sitharaman said the Council has agreed to review the decision to impose 28 per cent GST on online gaming, horse racing and casinos in 6 months after implementation. She also said that the likely date of implementation is October 1. 

Union Finance Minister, Nirmala Sitaraman, as per ANI said, "It (28% GST on online gaming and casinos) is expected to be implemented from 1st October... It is also decided that this decision will be reviewed after six months after it is implemented. When I say six months it does not mean starting from today, it begins after when it is implemented..."

 

The Finance Minister also mentioned that the value of supply for online gaming and actionable claim in casinos will be calculated at the entry level. She said that the GST Council discussed that if a 28 per cent tax is levied on the Gross Gaming Revenue (GGR), the net revenue generated would only be around 11-12 per cent. In comparison, the current 18 per cent tax on GGR results in net revenue of 8-9 per cent.

 

"...The council recommended that valuation of supply on online gaming & actionable claims in casinos may be done based on the amount paid or payable or payable to or deposited with the supplier by/or on behalf of the player, excluding the amount entered into the games, bets out of winnings of previous games & not on the total value of each bet placed," she said.

#WATCH | After the 51st GST Council meeting, Union Finance Minister, Nirmala Sitaraman says, "...The council recommended that valuation of supply on online gaming & actionable claims in casinos may be done based on the amount paid or payable or payable to or deposited with the… pic.twitter.com/yNeFFjcpNa

— ANI (@ANI) August 2, 2023

Finance Minister Nirmala Sitharaman on Wednesday chaired the 51st GST Council meeting, held via video conferencing in New Delhi. The meeting addressed various topics, including the 28 per cent tax levy that was previously announced on online gaming, horse racing, and casinos during the last session.

The highest decision-making body of the GST tax regime comprises the Union finance minister and representatives of all state also discussed the language of amendments that will be needed to enable taxing online gaming, she said. 

During the previous meeting, the GST Council had decided to impose a 28 per cent GST on the full face value of bets placed. In the latest meeting on Wednesday, the discussion revolved around the necessary tax law changes required to implement this decision.

It was revealed that the Delhi finance minister opposed the tax levy on online gaming, while Goa and Sikkim advocated for the levy to be based on the Gross Gaming Revenue (GGR) rather than the face value. Finance Minister Nirmala Sitharaman also mentioned that states like Karnataka, Gujarat, Maharashtra, and Uttar Pradesh were in favor of implementing the decision.