28 per cent tax on online gaming: The Goods and Services Tax (GST) Council resolved to apply a standard 28% tax on full face value for online gaming, casinos, and horse racing at its 50th meeting on Tuesday (July 11).
The government is now expected to introduce a legal amendment in the monsoon session of Parliament. This will allow for the inclusion of online gaming and horse racing under actionable claims. Thus facilitate taxation of these categories with no distinction for game of skill or chance.
Potential Impact of 28 per cent on the Online Gaming Industry
While the government has stated that this decision is not designed to end any business, online gaming companies. They have expressed concern about the impact of this action on the industry. It is likely to damage volumes and consequently gaming companies’ profitability.
The uniform levy of 28 per cent tax applicable on the face value of the chips purchased of casinos. On the full value of the bets placed with bookmaker/totalisator in the case of horse racing. The full value of the bets placed in case of online gaming.
Inclusion of Online Gaming and Horse Racing as Taxable Actionable Claims under GST
Earlier, the ministerial panel on online gaming, casinos, horse-racing had discussed the other option of levying tax on gross gaming revenue or platform fee, that is, the charge paid to avail the gaming services, but this did not find favour.
The government will bring in amendments to the GST-related laws to include online gaming and horse racing. It will be in Schedule III as taxable actionable claims. In the context of GST, an actionable claim is defined as goods under the Central Goods and Services Tax Act, 2017. It is a claim to an unsecured debt or a claim to any beneficial interest in movable property that is not in the possession of the claimant.
So far, lottery, betting, and gambling were classified as actionable claims. Now, horse racing and online gaming will be added.
More Stories
पूर्व भारतीय क्रिकेटर रॉबिन उथप्पा पर गंभीर आरोप के बाद जारी हुआ अरेस्ट वारंट
Gujarat Shocker: Woman Claims Nerve Damage After Doctor Operates on Wrong Leg
Indian-Origin Immigrant Jailed for 5 Years in UK Wickes Assault Case