Taxing Online Gaming Will Not Legalise Them In States Which Banned Them: Revenue Secretary

The Revenue Secretary's comment came after Tamil Nadu’s representative on GST Council expressed apprehension about the implications of GST on online gaming.

Revenue Secretary Sanjay Malhotra said that the language of the CGST amendment will take Tamil Nadu's ban on online gaming into account. ( Image Source :PTI )

Revenue Secretary Sanjay Malhotra on Wednesday said that imposing 28 per cent GST on online gaming will not change the legal status of them in states where they are prohibited. The Revenue Secretary's comment came after Tamil Nadu’s representative on GST Council expressed apprehension about the implications of GST on online gaming.

Revenue Secretary, Sanjay Malhotra, as per ANI, said, "Betting is already liable to GST today and it does not make it legal...Betting and gambling are illegal and liable to tax. Taxing online gaming will not result in legalising online games in those states which have banned them."

#WATCH | Revenue Secretary, Sanjay Malhotra says, "Betting is already liable to GST today & it does not make it legal...Betting & gambling are illegal & liable to tax. Taxing online gaming will not result in legalising online games in those states which have banned them..." pic.twitter.com/e0wq1EZH9C

— ANI (@ANI) August 2, 2023

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

 

 

Following the 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 which is expected on October 1.

The Finance Minister also said that states like Delhi, Goa, and Sikkim raised concerns and sought a review of the tax rate, while Tamil Nadu, where online gaming is banned, expressed apprehension about its implications.

On the other hand, West Bengal, Bihar, Chhattisgarh, Uttar Pradesh, Himachal Pradesh, Maharashtra, and Gujarat urged for the immediate implementation of the 28 per cent GST on the face value, she said. Adding that the GST Act amendment will be taken up in this Parliament session, with a likely implementation date of October 1. 

Revenue Secretary Sanjay Malhotra said that the language of the CGST amendment will take Tamil Nadu's ban on online gaming into account. The Revenue Secretary further clarified that voting on the decision was not required at the meeting, as only a few states dissented and if any changes are required in the GST rate after the review, the government can do it via a notification and will not need to amend the law again.

Additionally, Sanjay Malhotra also said that the government will introduce a specific provision in the law requiring registration of off-shore online gaming and a monitoring cell under the Directorate General of GST Intelligence (DGGI) is being set up to monitor offshore gaming companies if they are operating without paying tax.