Betting-based online gaming firms said to face Rs 1 lakh crore GST notice

of India Online gaming The industry received a show-cause notice amounting to Rs. According to sources, 1 lakh crore rupees. The notices also come after the industry raised concerns about the applicability GST rate

The government insisted that the 28 per cent GST rate should have started from October 1 as per the law.

In August 2023, the GST Council amended the Act, making it clear that all online game Betting is subject to a 28 per cent GST rate on the full value of bets placed, regardless of skill or chance involved, effective October 1. This clarification aims to eliminate any possible errors.

Central Board of Indirect Taxes and Customs (CBIC) Chairman, Sanjay Agarwal, announced India’s readiness to implement this 28 percent GST rate on online gaming, following consensus among all Indian states. The amendment to the GST Act in the Lok Sabha paved the way for this change in the tax system.

During its last monsoon session, the Lok Sabha passed two amendments to the Goods and Services Tax (GST) Act. These amendments were primarily aimed at introducing a 28 percent GST rate for online gaming, casinos and horse racing.

The amendments are in line with the GST Council resolution from August 2, which aimed to tax online gaming, casinos and horse racing.

Further, to ensure compliance, the GST Council has recommended addition of specific provisions in the Integrated Goods and Services Tax (IGST) Act, 2017.

These provisions include liability to pay GST on online money gaming supplies from foreign suppliers to Indian consumers, along with measures to address non-compliance.

Online gaming and actionable claims in casinos will be assessed based on the amount paid or payable to the provider, excluding prior winnings, ensuring a consistent and clear approach to taxation.

India’s effort to tax online gaming falls within a larger effort to bring various sectors under the GST framework, ultimately streamlining tax collection and clarifying tax rates for these growing industries.

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