NEW DELHI: Finance Minister Nirmala Sitharaman announced that a 28% tax will be imposed on the full face value of bets placed on online gaming, starting from 1st October. This decision came after the 51st GST Council meeting, where the implementation of the GST on online gaming and casinos was discussed, and it is set to be reviewed after six months.

During the meeting, Delhi's finance minister opposed the tax levy on online gaming, while Goa and Sikkim favored taxing the Gross Gaming Revenue (GGR) instead of the face value of bets.

On the other hand, several states, including Karnataka, Gujarat, Maharashtra, and Uttar Pradesh, supported the implementation of the tax, as decided in the previous meeting. Finance Minister Sitharaman stated that the necessary changes in both central and state laws will be made to enforce the new levy from October 1.

The 51st GST Council meeting also recommended amendments in the CGST Act 2017 and IGST Act 2017. These changes aim to provide clarity on the taxation of supplies in casinos, horse racing, and online gaming. Additionally, the Council suggested inserting a specific provision in the IGST Act, 2017, to address the liability of paying GST for the supply of online money gaming by foreign suppliers to individuals in India. A simplified registration scheme will be introduced for the said supplier, and non-compliance may result in the blocking of public access to relevant information.

Regarding valuation, the Council proposed that the supply of online gaming and actionable claims in casinos should be based on the amount paid or payable to the supplier on behalf of the player, excluding previous winnings. It was suggested to amend the CGST Rules, 2017, to accommodate these provisions.

Efforts are underway to complete the amendment process at the earliest and have the changes take effect from 1st October 2023.

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