GST on e-gaming, casinos may be increased to 28%

19/05/2022
NEW DELHI: A panel of ministers from several states is in favour of levying 28% GST on online gaming, casinos and race courses, with the issue expected to be taken up at the next meeting of the GST Council.

The group of ministers (GoM) comprising representatives from several states finalised its recommendations on Wednesday and is expected to submit its report over the next few days. “The GoM on casinos, race courses and online gaming has come to a consensus,” Meghalaya chief minister Conrad Sangma, who chairs the panel, tweeted, without elaborating the details.

Currently, the segment faces an 18% levy and the proposed increase has triggered an intense lobbying to stall the move or at least have it tweaked.

Privately, some tax practitioners said this is a move in the right direction, given that several other items, such as cement is in the 28% bracket.

“With the number of online gamers in India expected to grow to 650 million by 2025, the Indian online gaming industry is well on its way to revolutionise the global gaming market, and favourable taxation is one of the biggest boosts to this growth. Our recommendation to the GoM is to levy GST on the GGR or platform fee earned by operators. This is in the greater interests of the industry, and also in accordance with global practices. We hope the outcome will be reflective of the same,” lobby group the Federation of Indian Fantasy Sports said.

“The increase in the GST rate on casino, racecourse and online gaming is likely to see a sharp increase in revenue for the government from these sectors. However, all forms of online gaming should not be considered for GST at 28% as many such games are merely meant for entertainment,” said Saurabh Agarwal, tax partner at consulting firm EY India.

Team Edu-Visor