Online Gaming Tax: 28 Percent GST to Be Levied From October 1, Review After 6 Months

The decision to impose a 28 percent tax on the full face value of bets placed on online games will be implemented from October 1 even though there was demand for a review from states like Delhi and Goa, finance minister Nirmala Sitharaman said on Wednesday.

The GST Council — the highest decision making body of the new indirect tax regime that comprises Union finance minister and representatives of all states — discussed the language of amendments that will be needed to enabling taxing online gaming, she said after the panel meeting.

The panel had at its last meeting decided to levy a 28 percent GST on full face value of bets placed and Wednesday's meeting was to deliberate on the tax law changes that would be required to implement it.

Sitharaman said Delhi finance minister opposed the levy of the tax on online gaming while Goa and Sikkim wanted the levy on GGR (gross gaming revenue) and not on face value.

Sitharaman, however, said other states ranging from Karnataka to Gujarat, Maharasthra and Uttar Pradesh wanted the decision taken at the last meeting to be implemented.

The new levy, after required changes are made in the central and state laws, is likely to come into effect from October 1, she said.

There would be a review of the levy after six months of its implementation, she added.

Last month, India decided to impose a 28 percent tax on funds that online gaming companies collect from their customers for every bet, shocking the nascent industry which is backed by global investors.