GST Council meet: Online gaming, horse racing and casinos to attract 28% GST on full face value
Section 3 of the GST Act will be amended to bring online gaming and horse racing as taxable actionable claims. The bill is likely to be introduced in the Monsoon Session of Parliament
- Jul 11, 2023,
- Updated Jul 11, 2023 8:47 PM IST
Online gaming, horse racing and casinos will attract Goods and Services Tax (GST) at the rate of 28% on the full face value. The decision was taken by the GST Council at its 50th meeting on Tuesday.
Announcing the decision, Finance Minister Nirmala Sitharaman, who chairs the GST Council, told reporters in New Delhi that some amendments to the GST Act will also be made to include online gaming.
Section 3 of the GST Act will be amended to bring online gaming and horse racing as taxable actionable claims. The bill is likely to be introduced in the Monsoon Session of Parliament.
Tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker or totalisator in the case of horse racing and on the full value of the bets placed in case of the online gaming, an official release said.
While the move has left industry disappointed, Sitharaman said that the intention was not to finish the industry. Noting that this was a "moral question", she said that the industry cannot be given more encouragement than essential goods.
Revenue secretary Sanjay Malhotra noted that the rate has always been 28% on online gaming. The old cases will continue. The courts have taken certain decisions but they will be appealed by the revenue department, he further said.
“We are disappointed that the GST Council and authorities have chosen to apply 28% GST on the total entry amount including prize money. This decision will have a chilling effect on the $ 2.5-billion FDI already invested by investors and jeopardise potentially any further FDI in the sector. Further, this decision will shift users to illegal betting platforms leading to user risk and loss of revenue for the government," said Joy Bhattacharjya, Director-General, Federation of India Fantasy Sports.
Abhishek Jain, National Head & Partner, Indirect taxes, KPMG also noted that while the detailed amendment would need to be evaluated, the move for levying 28% GST on full value is much against the industry expectations. "This recent growing sector was expecting relief with clarification on GST only being applicable on the platform fee earned by them," he said.
Online gaming, horse racing and casinos will attract Goods and Services Tax (GST) at the rate of 28% on the full face value. The decision was taken by the GST Council at its 50th meeting on Tuesday.
Announcing the decision, Finance Minister Nirmala Sitharaman, who chairs the GST Council, told reporters in New Delhi that some amendments to the GST Act will also be made to include online gaming.
Section 3 of the GST Act will be amended to bring online gaming and horse racing as taxable actionable claims. The bill is likely to be introduced in the Monsoon Session of Parliament.
Tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker or totalisator in the case of horse racing and on the full value of the bets placed in case of the online gaming, an official release said.
While the move has left industry disappointed, Sitharaman said that the intention was not to finish the industry. Noting that this was a "moral question", she said that the industry cannot be given more encouragement than essential goods.
Revenue secretary Sanjay Malhotra noted that the rate has always been 28% on online gaming. The old cases will continue. The courts have taken certain decisions but they will be appealed by the revenue department, he further said.
“We are disappointed that the GST Council and authorities have chosen to apply 28% GST on the total entry amount including prize money. This decision will have a chilling effect on the $ 2.5-billion FDI already invested by investors and jeopardise potentially any further FDI in the sector. Further, this decision will shift users to illegal betting platforms leading to user risk and loss of revenue for the government," said Joy Bhattacharjya, Director-General, Federation of India Fantasy Sports.
Abhishek Jain, National Head & Partner, Indirect taxes, KPMG also noted that while the detailed amendment would need to be evaluated, the move for levying 28% GST on full value is much against the industry expectations. "This recent growing sector was expecting relief with clarification on GST only being applicable on the platform fee earned by them," he said.