18.09.2023: Madhya Pradesh cabinet to approve Ordinance to levy 28% GST on deposits of online gaming & casinos today

Madhya Pradesh state government is now set to approve the Ordinance for new GST rates on online gaming. The Ordinance will be presented in the cabinet meeting, which is planned for September 16. Notably, the meeting will be chaired by the Chief Minister Shivraj Singh Chouhan.

After the bill is passed, MP will become the third state to implement 28% GST on online gaming, casinos and horse racing. The Goa and Maharashtra governments recently approved the same bill in their respective assemblies.

Karnataka also presented the bill in their state legislative assembly. However, due to differences in opinion, the bill was put on hold and will be presented in the next session.

The decision to impose 28% GST on full face value for online gaming, casinos and horse racing came as a near unanimous decision during the 50th GST council meeting. The only states that were opposing the decision were Goa, Sikkim and Delhi, as per IBC24.

Online gaming firms facing tough times amid increased GST burden
While the increase in GST was expected, the change in the method of implementation shocked the online gaming sector. Real money gaming industry requested to reconsider the decision as it came as a setback to the sector’s growth.

Another GST council meet was held where the decision to take the full face value was preserved, but the method to take the tax was levied on the initial entry amount. Finance Minister Nirmala Sitharaman also reassured the industry that the GST council will again discuss the GST rate after six months of implementation and will take decisions accordingly.

Despite that, online real money gaming firms saw many lay-offs due to increased tax liabilities. Big firms like Mobile Premier League (MPL) and Spartan Poker laid off a large chunk of their staff.

Few online gaming firms like Fantok and Quizy halted their operations due to increased GST burdens.

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