GST Meet: Online Gaming To Attract 28% GST From October 1, Says FM Sitharaman

Finance Minister Nirmala Sitharaman announced on Wednesday that a 28% tax on online gaming will come into effect from October 1. The decision was made during a meeting of the GST council, where the valuation of supply on online gaming and actionable claims in casinos was discussed.

According to the announcement, the valuation of supply for online gaming and casinos will be based on the amount paid or payable to the supplier by or on behalf of the player, excluding the amount entered into the games and bets out of winnings of previous games. The tax will not be levied on the total value of each bet placed.

During the meeting, it was revealed that Delhi finance minister opposed the tax on online gaming, while Goa and Sikkim preferred the tax to be based on gross gaming revenue (GGR) rather than face value.

In the previous meeting, the council had decided to impose a 28% GST on the full face value of bets placed. The recent meeting aimed to discuss the necessary tax law changes required for its implementation. The Finance Minister also mentioned that a review of the levy would take place after six months of its implementation.'

Sitharaman clarified that the implementation would start from October 1 and the review period would begin after the tax is put into effect.

The GST council, which comprises the Finance Minister and representatives of all states, deliberated on the language of amendments needed to enable taxing online gaming.

Addressing concerns about betting, Revenue Secretary Sanjay Malhotra emphasized that betting is already liable to GST, and the new tax does not legalize betting or gambling, which remain illegal and taxable. Implementing the tax on online gaming will not change the legality of online games in states that have banned them.