GST review assessment for online gaming to be considered after March, states Revenue Secretary Sanjay Malhotra

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The GST Council is set to review the 28 percent Goods and Services Tax (GST) on full face value on online gaming only after March 31, Revenue Secretary Sanjay Malhotra said.

The assessment of the GST on online gaming is not slated for discussion in the upcoming council meeting but is instead planned for the subsequent session. As the six-month period concludes on March 31, the possibility of addressing the GST on online gaming during the meeting following that timeframe is being considered, stated Malhotra in an interview with Moneycontrol.

Malhotra emphasized that a review does not necessarily imply a change in rates; rather, it is a means to assess the current situation and determine if any adjustments are required.

The GST Council in its meetings in July and August 2023 had decided to recommend the levy of 28% GST on full face value of bets placed through money gaming platforms and horse racing and casinos which came into effect on 1 October. The tax department reported viewing the change as only clarificatory in nature and 28% tax on full value of wager amount is applicable since July 2017.

“Industry is already aware of our stand. They want to pay at 18% on the gross gaming revenue (GGR) or the platform fee. The law already existed that they need to pay 28% GST on each bet placed, being a game of chance,” a top Government official was quoted as saying by TNIE.

Several gaming companies have taken a stance against the GST notices, following heavy losses and decreased revenues, including Delta Corp, which called the notices ‘arbitrary’.

The revenue secretary expressed satisfaction on the new regime and said the revenue potential was untapped until the new regime. GST collection from online gaming in Nov-Jan period touched rupees 3,470 crore.

During an interview on Feb 1, 2024, the revenue secretary said online money gaming platforms are paying Rs. 1200 crores per month GST on an average from 1st October, 2023 since the new GST regime of 28% on deposits was introduced compared to Rs. 200 crores per month on an average that they were paying before the new regime came in (18% on platform fees).

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