The GST Council adjourned the Group of Ministers on imposing 28% goods and services tax (GST) on casinos, online gaming, and lottery. The GoM formed under the orders of the GST Council is asked to submit the report on the issue after 15 days. Headed by Meghalaya chief minister Conrad Sangma, the members will review its proposals.
The GoM will review whether the tax should be increased on the total amount spent at a casino or the amount spent on gambling.
The GoM had suggested that in the case of online gaming, the whole procedure of online gaming should be taxable at 28% including the contest entry fee paid by the players for participating.
“There is no reconsideration of the 28% for online gaming and horse races. It was not even discussed in the council meeting. Following a request from Goa, we ought to add casinos” a member of the Group of Ministers said.
Currently, a GST of 18% is imposed on casinos, horse racing, and online games where no betting or gambling is involved. GST of 28% is imposed for online games involving betting or gambling. The GST Council adjourned the GoM’s proposal to levy GST at 28% on all these activities.
The gaming community didn’t take the news of increased GST rates with ease. Whereas, Industry experts also raised concerns about combing skill-based gaming and real-money gaming together. Games such as Ludo, Poker, and Rummy come under skill-based gaming whereas real money gaming has betting, gambling, and horse racing.
According to Inc42, the number of internet users in India is set to cross one billion in 2023 while the number of online gaming users in India is also expected to grow to around 657 million users in 2025. The Indian online gaming industry is expected to grow at a fast pace. Although adding more tax can come as a setback for the industry.
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