11.08.2023: India to move Bills amending GST laws to include 28% GST on online gaming, casinos, horse race clubs

Union Finance Minister Nirmala Sitharaman will introduce a Bill seeking amendments to the Integrated Goods and Service Tax Act, 2017, and the Central Goods and Service Tax Act, 2017, in the Lok Sabha on Friday. The two Bills are called The Central Good and Service Tax (Amendment) Bill, 2023, and The Integrated Good and Service Tax (Amendment) Bill, 2023.

The amended provisions in the GST laws specifically define online gaming, online money gaming, virtual digital assets used to pay for online games and suppliers in case of online gaming.

The changes to GST laws were approved by the Union Cabinet on Wednesday. In its 51st meeting on August 2, the GST Council recommended amendments to the Schedule III of the CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming, sources told news agency PTI.

Central Good and Service Tax (Amendment) Bill, 2023

The Bill to amend the Central Goods and Services Tax Act paves the way for implementation of the 28 percent Goods and Service Tax (GST) on the face value of entry-level bets placed on online gaming platforms, casinos, and horse racing.

The online gaming industry and some horse racing clubs are currently paying GST at the rate of 18 percent on platform fees/commission ranging from 5 to 20 percent of the full face value, while some horse race clubs are paying 28 percent on the full face value.

They are disputing the 28 percent levy on actionable claims in the form of betting and gambling before various legal fora. Casinos, too, are currently paying 28 percent GST on Gross Gaming Revenue (GGR).

Levying 28 percent GST on the full face value of entry-level bets would result in increased GST revenues.

Integrated Good and Service Tax (Amendment) Bill, 2023

The Council also recommended inserting a provision in the IGST Act, 2017, to impose GST liability on online money gaming provided by offshore entities. Such entities would be required to get GST registration in India.

The amendments will also provide for blocking access to online gaming platforms located overseas in case of failure to comply with registration and tax payment provisions.

According to sources to PTI, the amended provisions in the GST laws will be effective from October 1.

Source: CNBC TV 18

Register Today