TAX ON ONLINE GAMING: 28% Tax To Be Effective From Oct 1

Online gaming GST Council meeting: FM Nirmala Sitharaman claims that it took three long years of deliberation to decide to levy a 28% tax.

Online gaming GST Council meeting: The 51st GST Council, presided over by Union Finance Minister Nirmala Sitharaman, made the decision to maintain the 28% tax on online gaming, gambling, and horse racing on Wednesday. The council also talked about how to put the tax into effect. In a statement to the public following the Council meeting, Sitharaman stated that the 28% GST on online gambling is anticipated to go into effect on October 1 and will be reassessed six months after that date.

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The finance minister stated at the news conference that it took three long years of deliberation to decide to impose the 28% tax. According to her, the GST Council reviewed the precise wording of the revisions that will be required to permit taxing of online gaming.

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She stated that the initial payment made for the game will be subject to a 28% tax, not the sum of all bets made. The gains, which might be utilized to make additional bets, are exempt from GST.

According to the finance minister, the present GGR of 18% generates a net revenue of 8–9%.

“50 Indian online gaming companies represented by FIFS and EGF, which appreciate the government addressing the industry’s concerns on the issue of repeat taxation,” the Federation of Indian Fantasy Sports (FIFS) and E-Gaming Federation (EGF) said in a statement in response to the most recent decision. The new tax structure will cause a very hefty 350% increase in GST and set the Indian online gambling business back several years, even while it clarifies and eliminates uncertainties. However, it will give gaming businesses an opportunity to invent and restore India’s gaming industry’s base.

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The Council authorized the imposition of a 28% tax on the full-face value of wagers placed in online gambling, casinos, and horse racing at its 50th meeting last month. The gambling industry angrily disagreed, branding the ruling “unconstitutional, irrational, and egregious” according to the All India Gambling Federation (AIGF).

The most recent meeting, which was conducted less than a month after the GST Council met on July 11, covered the procedures for assessing the supply value in online gambling and casinos in order to impose a 28% tax.

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