Centre notifies amendments in GST laws, to tax 28% on online gaming, casinos from today

The central government has notified the amendments in GST legislation passed by the Lok Sabha in August so as to impose a 28 per cent tax on online gaming, casinos, and horse racing. The amendments will come into effect as was earlier announced -- from October 1. The amendments in the GST acts were made after they were proposed by the GST Council to make way to levy 28 per cent taxes on such items.

On August 11, the Lok Sabha, during its final session of the monsoon season, passed amendments to two Goods and Service Tax (GST) laws with a voice vote and minimal debate. These amendments relate to the Integrated Goods and Services Tax (Amendment) Bill, 2023, and the Central Goods and Services Tax (Amendment) Bill, 2023. These provisions inserted into the law will deal with the liability to pay GST on the supply of online money gaming from foreign suppliers to Indian customers, along with measures for blocking access to any related information in case of non-compliance.

Finance Minister Nirmala Sitharam had earlier said the move to impose taxes on such items would be reviewed after six months after it was implemented. The time frame for this would start from the time it is implemented, the Finance Minister had clarified. At a July 11 meeting, the GST Council decided to levy a uniform 28 per cent tax on full face value for online gaming, casinos and horse racing.

A Group of Ministers (GoM) was earlier constituted to look into the issues related to taxation on casinos, horse racing and online gaming. The GoM submitted its first report in June 2022 and it was placed before the GST Council in its 47th GST Council meeting wherein, it was decided that the GoM may relook into all the issues once again. The GoM submitted its report and it was placed before the recently held 50th GST Council meeting.

The GoM, in its second report, recommended that since no consensus could be reached on whether the activities of online gaming, horse racing and casinos should be taxed at 28 per cent on the full-face value of bets placed and left it on the GST Council to decide. The next meeting of the GST Council will be held on October 7 in New Delhi, though the agenda is not yet known.