GST Council has imposed a 28 percent tax on online gaming, casinos, and horse racing. Nirmala Sitharaman announced the announcement at the 50th GST Council meeting. Both skill-based and chance-based games are subject to the 28 percent tax on online gaming.
After much debate, the GST Council decided to tax online gaming, casinos, and horse racing. In June last year, a Group of Ministers (GoM) who were assigned to study these taxation issues submitted their first report. A report was prepared and presented to the 47th GST Council meeting, but the GoM requested a second review. The GoM was unable to reach a consensus on whether a 28 percent tax should be imposed on online gaming, horse racing, and casinos before the 50th GST Council meeting.
During the 50th GST Council meeting, online gaming and horse racing were added to Schedule III as taxable actionable claims. For online gaming, a 28 percent tax will be applied to the full value of the bets.
Indians are very fond of online fantasy gaming, especially in the sports sector with games like Dream11, Games24x7, and Mobile Premier League (MPL). In FY22, Indian fantasy sports saw a steady growth of 31 percent, and by FY27, it is predicted to reach Rs 25,240 crore.
FIFAS Director General Joy Bhattacharjya expressed disappointment with the taxation of online gaming. He told CNBC-TV18, “28% GST on online gaming will push consumers into the hands of illegal players.” Since online gaming is mostly a startup industry, 28 percent GST won’t survive. There is also concern about how consumers will now turn to illegal betting platforms.
