Months after the Centre implemented a 28% goods and services tax (GST) rate on online gaming from October 1 last year, the GST Council is likely to meet in June for a review after the formation of the new government. 

“The GST Council meeting will happen in June-end, after the new government comes in. It will review online gaming revenue from October 1 (2023) onwards…” Moneycontrol reported, citing a government official.

“The Council had decided 28% on the face value, and this is likely to continue as the GST revenue of the government from online gaming has increased 5-6 times in the last six months. The tax data will be compiled and presented before the Council,” the official added. 

Earlier, the GST received from such companies was at INR 200 Cr per month which has gone up since the 28% GST imposition to INR 1,000 Cr, the official said.

Last year, the GST Council announced its decision to impose a 28% GST on the amount being paid at the entry level for online gaming. The move was part of the efforts of the governments, both state and central, to regulate online real money gaming. 

In August, amendments to the Central Goods and Services Tax (Amendment) Bill, 2023 and the Integrated Goods and Services Tax (Amendment) Bill, 2023, were approved by the GST council. Later, the Parliament approved these amendments. 

The amendments related to the insertion of a provision in Schedule III of the CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming.

Under the new regulations, a uniform 28% tax will be applied on the full value of bets placed in online games, regardless of whether it involves games of skill or chance.

The decision to implement the 28% GST on online gaming has had far-reaching consequences.  

Several online gaming startups, including Gameskraft, Delta Corp and others received notices to pay INR 1.12 Lakh Cr GST.

Meanwhile, during a meeting with online gamers, Prime Minister Narendra Modi recently said that there is no need for regulations for the sector in the country. However, he said that the space could be uplifted by bringing it under an organised and legal structure.

Interestingly, this contradicts the Centre’s plans to bring in a regulatory framework to oversee the online gaming industry. Though MoS Rajeev Chandrasekhar told media that the Centre is “very bullish” about the sector, it would soon create a framework that envisages safe and permissible norms for the sector.

Source: Inc42