NEW DELHI: Parliament on Friday approved amendments to the goods and services tax (GST) laws, enabling the imposition of a 28% GST on the full value of bets placed in casinos, horse racing, and online gaming.
The amendments to the Central and Integrated GST laws were passed in the Lok Sabha without discussion. However, for the 28% levy to take effect, states will also need to make changes to their own GST Acts through legislative measures. By Friday afternoon, the Rajya Sabha returned the Bill to the lower House, clearing the path for its enactment.
Finance minister Nirmala Sitharaman has set a target date of October 1 for implementation of the new tax, which will be reviewed six months after its introduction. The online gaming sector, which has expressed concerns about the tax’s negative impact on investments and job opportunities, will be closely monitored by the government for its effects.
According to the finance ministry, after extensive deliberations spanning three years, the amendments have been carefully crafted to address various aspects of the rapidly growing online gaming sector in India. It said that the amendments don’t impact casual online gaming activities that don’t involve real money, betting, or wagering.
The focus of the amendments lies in regulating and taxing online money gaming. Those who are providing the services from abroad to individuals in India will have to do the GST registration mandatorily. This step ensures that overseas suppliers contributing to the Indian gaming market are appropriately registered and subjected to the relevant tax obligations.
Additionally, the amendments introduce a special provision to determine the tax liability of overseas suppliers engaged in online money gaming. This provision also facilitates simplified GST registration procedures for such suppliers. Furthermore, the authorities have been granted powers to block websites and platforms of non-compliant suppliers, ensuring compliance with tax regulations.
Not to impact gaming that don’t involve real money
Finance ministry said that the amendments don’t impact casual online gaming activities that don’t involve real money, betting, or wagering. Focus of the amendments lies in regulating and taxing online money gaming