Online gaming to be taxed at par with casinos and horse racing; can attract 28% GST

In a move that is expected to hit the nascent online gaming industry in India, a group of state finance ministers has proposed that the goods and services (GST) tax be hiked by 10 per cent to the highest slab rate of 28 per cent.

Government sources said the proposal, once formally approved by the federal GST Council headed by finance minister Nirmala Sitharaman, will bring the GST on online gaming in India on par with betting or gambling, which already attract 28 per cent GST.

The sources added that besides the consensus on the 28 per cent levy on online gaming, it was also decided that the tax will be on the entire face value or bet amount and not on the net amount after deducting the prize money.

In the case of casinos it was decided that the levy should be on the amount paid at the entry point – that is while purchasing chips, but not on every betting transaction.

In the case of horse racing, the existing practice of levying 28 per cent GST on the entire bet amount is proposed to be continued.

The state finance ministers group is headed by Conrad Sangma, the chief minister of Meghalaya. The meeting was attended by the finance ministers from Goa, Uttar Pradesh, Gujarat, Tamil Nadu and Maharashtra, and officers from Telangana.

Speaking to Business Today TV after chairing the meeting, Sangma said the ministers had arrived at a consensus on the issue of taxation on online gaming. “The GoM has prepared a detailed report that will be submitted to the GST Council by the end of this week”, he said.

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