Online Gaming in Big Problem As Parliament Passes Bill to Impose 28 Percent GST

In the Central GST (Amendment) Bill and Integrated GST (Amendment) Bill tabled by Finance Minister Nirmala Sitharaman, foreign companies operating in the country e-gaming Registration has also been made mandatory for companies. This bill also has a provision to block foreign gaming companies violating the rules of GST registration and payment of tax. A GST of 28 per cent has been imposed on the full value of bets in online gaming as well as casinos and horse racing clubs. The CGST (Amendment) Bill defines online gaming as a game played over the internet or any electronic network.

After the amendment in GST law, online gaming, casino and horse racing will be treated at par with lottery, betting and gambling. The amendments in GST laws will help in curbing money laundering, illegal income, black money and other illegal activities related to online gaming. Last month, the GST Council had agreed to impose 28 percent GST on the entire value of online gaming, horse racing and casinos. The GST Council was of the view that there should be no difference between ‘game of skill’ and ‘game of chance’. In the last meeting of the Group of Ministers (GoM), there was a consensus on the proposed tax on these activities, but there was no complete consensus of the GoM on online gaming because Goa had proposed to impose only 18 percent tax on the platform fees of online gaming. .

FICCI’s Gaming Committee, representing large online gaming firms, has requested CBIC not to increase taxes on online gaming. It says that the online gaming industry will suffer a huge loss because no business can survive with such high taxes. The E-Gaming Federation had termed the decision to impose 28 percent tax on online gaming as unfortunate. It said that this tax will cause a big blow to the industry.