Finance Minister Nirmala Sitharaman stated on Wednesday that a 28% tax on online gaming will go into force on October 1.
“The council recommended that valuation of supply on online gaming & actionable claims in casinos may be done based on the amount paid or payable or payable to or deposited with the supplier by/or on behalf of the player, excluding the amount entered into the games, bets out of winnings of previous games & not on the total value of each bet placed…”, the minister proclaimed during the meet.
The finance minister claimed that while Goa and Sikkim wanted to collect the tax on GGR (gross gaming income) rather than on face value, the finance minister of Delhi opposed the tax on online gambling.
The panel had already voted to impose a 28% GST on the full face value of bets placed, and the purpose of the meeting on Wednesday was to discuss the necessary adjustments to the tax code to put this decision into effect. After the levy has been in place for six months, she continued, it will be reviewed.
“It (28% GST on online gaming & casinos) is expected to be implemented from 1st October… It is also decided that this decision will be reviewed after six months after it is implemented. When I say six months it does not mean starting from today, it begins after when it is implemented”, Sitharaman further added.
The language of the revisions required to enable taxing online gambling was debated by the GST council, the highest decision-making body of the indirect tax system, which is made up of the finance minister and representatives of all the states.
Regarding betting, revenue secretary Sanjay Malhotra averred, “Betting is already liable to GST today & it does not make it legal…Betting & gambling are illegal & liable to tax. Taxing online gaming will not result in legalising online games in those states which have banned them…”.
