The goods and services tax (GST) council on Wednesday gave partial relief to online gaming companies clarifying that 28 per cent GST will be applicable on the actual cash or equivalent deposits made by players and not on the winning amounts being redeployed by them or on repetitive bets.
It has also brought the payments received and winnings paid in virtual digital assets (VDAs) by the online gaming companies and casinos when considering the valuation for imposing tax.
The council will review the decision after the implementation of the GST council decision, which is likely by October 1.
After the July meeting online gamers had expressed their apprehensive that the law committee of the GST Council may go for repetition taxation, which may be a death blow to industry, already facing the highest tax slab of 28%. According to estimates by industry executives, this could add up to 50-60% indirect tax burden on the users under certain conditions.
KEY DECISION
- Council approved all amendments proposed by the law committee
- 28% tax will be levied on the amount deposited with supplier
- Industry gets breather on repititive taxation
- Amendments to be implemented by October 1
- Distinguishes online money gaming and online gaming
- Virtual digital asset included in determining valuation
- GST on for casino on total amount paid by player
- Mandatory for offshore players to register in India
- They can be blocked under IT Act for non compliance
Source: The Economic Times
https://economictimes.indiatimes.com/news/economy/policy/gst-council-recommended-28-gst-on-deposits-with-companies/articleshow/102359866.cms?from=mdr
