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28% GST on Online Gaming, Casino and Horse Race Clubs

Himanshi Saini
August 11, 2023

The Central Goods and Services Tax (Amendment) Bill and the Integrated Goods and Services Tax (Amendment) Bill will be introduced in Parliament on Friday, along with a 28% GST on online gaming. FM Nirmala Sitharaman.

Tax Amendment Bill: The Central Goods and Services Tax (Amendment) Bill and the Integrated Goods and Services Tax (Amendment) Bill will be introduced in Parliament on Friday, along with a 28% GST on online gaming. Finance Minister Nirmala Sitharaman. The Bills, which the Cabinet approved last week, call for a 28% GST fee on horse racing, casinos, and online gaming.

What are the valuation rules for online gaming, casinos, and horse races:

According to the Council, GST should be applied to the entry-level valuation for online gaming and casino actionable claims. Additionally, rather than taking into account the entire sum of all bets placed, the value of these supplies could be calculated based on the amount paid or payable to the supplier by the player (excluding sums utilized for bets from prior winnings).

Also read: RBI Keeps No Change in Repo Rate at 6.5%

Union Finance Minister Nirmala Sitharaman to move The Central Goods and Services Tax (Amendment) Bill, 2023 today for consideration and passing in Lok Sabha.

(File photo) pic.twitter.com/LsMd1tP1nY
— ANI (@ANI) August 11, 2023

GST @ 28% on Winning Amount or Face Value: The GST Council has agreed to levy a 28% GST on the face value of bets and games rather than the gross gaming revenue (GGR) in order to streamline implementation and prevent difficulties.

In the case of casinos, tax will be charged on the face value of the chips purchased, in the case of horse racing, on the entire amount of bets placed with the bookmaker or totalizator, and in the case of online gaming, on the full value of bets placed.

GST Liability for International Suppliers: The Council suggests including a particular provision in the IGST Act 2017 to address this issue. With the implementation of this clause, suppliers based outside of India who provide people in India with services for real money gaming would be liable for paying GST.

Single Registration for International Suppliers: The GST Council recommends including a streamlined registration system that would enable International suppliers to get a single registration in India as a move toward making compliance easier.

Also read: Fed Increases Landing Rates by 25bps

#MonsoonSession2023

The Integrated Goods and Services Tax (Amendment) Bill, 2023 introduced in #Loksabha.@nsitharaman @nsitharamanoffc @FinMinIndia pic.twitter.com/QZ5c2kABOS
— SansadTV (@sansad_tv) August 11, 2023

Consequences of Non-Compliance for Foreign Players: To ensure compliance, the Council suggests preventing the public from accessing any information pertaining to the offering of online real money gaming services by foreign providers who disregard the requirements for registration and tax payment.

Implementation Timeline: The Council wants to hasten the amendment of pertinent Acts, with the modifications anticipated to take effect on October 1, 2023.

Note: In order to give stakeholders a clearer understanding of the GST Council’s conclusions, the offered recommendations have been condensed in this release. Through the relevant circulars, notices, and legal modifications, which will have full legal effect, these proposals will be formally implemented.