India GST Council to review plan to impose 28% tax on online gaming

The decision to impose a 28% tax on the full face value of online gaming will be reviewed by the GST Council, according to Indian Revenue Secretary Sanjay Malhotra, but only after March 31.

Malhotra emphasized that the review process looks to see whether any modifications are necessary rather than necessarily altering tax rates. With effect from October 1, 2023, the GST Council has already increased the tax rate on online gaming from 18% to 28% of the whole face value. Since then, the sector’s revenue has almost doubled, according to the income secretary.

If the tax rate remained unchanged, the government would receive a significant amount of GST revenue. The government may get more than 7,000 rupees ($84) in FY24 and 14,000 rupees ($168) in FY25 from the GST revenue from online gaming, up from 1,600 rupees ($20) in 2022–2023, according to projections.

Malhotra highlighted the increase in income that has occurred in the last three months with the implementation of the new online gaming tax regime, with GST revenue rising from 605 rupees ($7) to 3,470 rupees ($42). This translates to an additional 12,000 rupees ($144) in GST revenue from online casinos annually.

Every time a player deposits money on an online gambling site, a 28 percent general sales tax (GST) is applied to the face value; for tax purposes, the duration of the deposit is more significant than the amount of time spent gaming.

Original story by: Asia Gaming Brief