New Delhi: Starting from October 1, online gaming companies in India will be required to charge a 28 percent Goods and Services Tax (GST) on the full value of bets placed by users. Additionally, offshore gaming platforms will also need to register for GST in India to continue their operations. This significant development was announced by the Finance Ministry, which issued a notification stating that October 1 is the appointed date for the amended provisions in the Central GST (CGST) and Integrated GST (IGST) laws to become effective.
The amendment specifically categorizes online gaming, casinos, and horse racing as “actionable claims.” These categories are now similar to lottery, betting, and gambling, which means they are subject to a 28 percent GST on the total face value of the bets involved.
While this announcement marks a significant change in the taxation of online gaming in India, some concerns have been raised by e-gaming companies. They point out that many Indian states have yet to pass amendments to their respective State GST (SGST) laws. This situation could potentially lead to confusion and operational challenges, as there might be discrepancies between the central and state tax laws regarding the taxation of online gaming.