The GST Council has decided to clarify the levy of 28 percent GST on online gaming platforms
New Delhi:
While states like Delhi and Goa retrospectively raised the issue of tax demands on online gaming companies and casinos, Finance Minister Sanjay Malhotra on Saturday reiterated that 28 percent GST was already levied on online gaming and casinos.
“Certain members had raised the issue of retroactive taxation. They were informed that this is not retroactive, and this was previously the law. These obligations already existed because online games with money were played with betting… They were already attracting (28 per cent GST) through betting or gambling,” Malhotra told reporters.
During the 52nd GST Council meeting, Delhi and Goa raised the issue of tax requirements for e-gaming companies and casinos.
Delhi Finance Minister Atishi said that tax bills for the past six years, calculated at a much higher rate of 28 percent, will be sent to online gaming companies even though this 28 percent GST would be implemented on October 1.
“A sector with a turnover of Rs 23,000 crore, you throw a tax bill of Rs 1.5 lakh crore… this is to kill the industry. This shows an unsafe, volatile investment environment in Indian startups,” Atishi said.
Malhotra further said that some states such as Delhi and Goa raised the issue of online gaming companies facing GST demands for alleged evasion.
“There have been retrospective discussions on the charge (tax returns) for these companies. Since DGGI is an independent body, there cannot be any interference. The GST Council chairman said that if necessary, they would make clarifications to DGGI would make available,” said Chhattisgarh deputy. Prime Minister TS Singh Deo, also a member of the GST Council, said this.
The GST Council, during its meetings in July and August, had decided to clarify the levy of 28 percent GST on the full face value of bets placed on online gaming platforms, horse racing and casinos.
Online gambling, casinos and horse racing, like lotteries, betting and gambling, were classified as claim-eligible claims under GST with a tax of 28 percent. The changes to Central GST and Integrated GST have been approved by Parliament and notified by the central government with effect from October 1.
States also had to make changes in the GST (SGST) laws. So far, 18 states have adopted the amendments, either in their assemblies or through an ordinance.
The remaining thirteen states would also adopt the amendments, effective October 1 in due course.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is published from a syndicated feed.)
