28% GST On Online Gaming: 51st GST Council Recommends Laws To Provide Clarity

The 51st GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Nirmala Sitharaman via video conferencing in New Delhi.

The meeting was also attended by Union Minister of State for Finance Shri Pankaj Chaudhary besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.

The GST Council in the 50th meeting had deliberated on the Second Report of the Group of Ministers (GoM) on Casinos, Race Courses and Online Gaming and had recommended that the actionable claims supplied in Casinos, Horse racing and Online gaming may be taxed at the rate of 28% on full face value, irrespective of whether the activities are a game of skill or chance.

The Council had also recommended that the law may be amended to provide clarity in the matter.

The GST Council in its 51st meeting recommended certain amendments in the CGST Act 2017 and IGST Act 2017, including an amendment in Schedule III of the CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming.

The Council also recommended inserting a specific provision in IGST Act, 2017 to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India. The provision provides for single registration in India for the supplier through a simplified registration scheme. The provision provides For blocking of access by the public to any information generated, transmitted, received or hosted in any computer resource used for the supply of online money gaming by the supplier in case of failure to comply with provisions of registration and payment of tax.

The Council also recommended that valuation of the supply of online gaming and actionable claims in casinos may be done based on the amount paid or payable to or deposited with the supplier, by or on behalf of the player (excluding the amount entered into games/ bets out of winnings of previous games/ bets) and not on the total value of each bet placed.

The Council recommended that CGST Rules, 2017 may be amended to insert specific provisions for the valuation of the supply of online gaming and the supply of actionable claims in casinos.

An effort will be made to complete the process of making amendments to the Act at the earliest and bring the amendments into effect from 1st October 2023.

Date: 02/08/2023

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