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The Group of Ministers (GoM) announced that online gaming, horse racing, and casinos will now be subjected to a 28 percent GST on the total value of bets. Finance Minister Nirmala Sitharaman shared this decision during the Council Meeting 2023.
"GST Council’s discussions today on online gaming were substantive. The Council will ensure it is in touch with the IT ministry. We will align with the regulation the ministry brings in," FM said. However, the implementation of the 28 percent GST on online gaming will be effective after the necessary amendments to the GST law.
Sudhir Mungantiwar, the Maharashtra forest cultural and fisheries minister, highlighted that the GST Council had eliminated the differentiation between games of skill and the chance for online gaming. Currently, online betting and gambling are subject to a 28 percent GST, regardless of the nature of the game. On the other hand, other games attract an 18 percent levy on gross gaming revenue (GGR).
Industry experts were outraged by the Council's decision, particularly regarding the 28 percent GST on online gaming and horse racing.
Roland Landers, chief executive officer of The All India Gaming Federation, said, "The decision ignores over 60 years of settled legal jurisprudence and lumps online gaming with gambling activities. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses, and the only people benefitting from this will be anti-national illegal offshore platforms.”
Director-General of the Federation of Indian Fantasy Sports, Joy Bhattacharjya expressed disappointment that the GST Council and authorities chose to impose a 28% GST on the total entry amount, including prize money.
Aaditya Shah, COO of IndiaPlays said in a statement, "This higher tax burden will impact companies' cash flows, limiting their ability to invest in innovation, research, and business expansion. There is a fine line between skill-based games and casinos/betting apps, and they must not be treated the same way."
However, Finance Minister Nirmala Sitharaman stated that the 28% GST on online gaming and casinos was not intended to target any specific industry. "The decisions were intensive and were taken after consultation with all the members, including those representing states like Goa and Sikkim where casinos form a key part of the tourism sector," she added.
Here is a list of goods and services that will become cheaper as a result of this meeting:
- Cancer medications, medicines for uncommon disorders, and food goods created for special medical uses are now GST-free.
- The tax rate on food served in cinema halls has been reduced from 18 percent to 5 percent.
- Additionally, private organizations offering satellite launch services will be exempt from GST.
- Furthermore, the GST rates on uncooked/unfried extruded snack pallets, fish-soluble paste, and imitation Zari threads have been reduced to 5 percent from their previous rates of 18 percent and 12 percent, respectively.
Written by Harshita Kumar
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