The Government of India has imposed a 28% GST on online gaming, casinos and horse riding recently. At the 50th meeting of the GST (Goods and Services Tax), it was decided to impose a 28% GST on online gaming, casinos and horse racing.
In the meeting, the GST on uncooked/unfired snack pellets, cancer medicine and imitation zari thread was reduced. Niramala Sitharaman, the finance minister, made clear that the GST imposed on these gambling streams was not done with any intent to end any industry.
The finance minister said that the discussion that happened was on the moral grounds of whether these should be taxed at the same rate as the essential items. The finance minister also said that the GST council’s decision focused on the taxation part of online gaming and it will align with the regulation of the Ministry of Electronics and Information Technology.
The tax on these online gaming companies will be imposed without considering whether the games require skill or were based on chance and there will be an amendment in the GST law to tweak the definition of actionable claim, the finance minister added.
The online gaming companies have said that this decision will disturb the online gaming industry and it will affect gaming volumes and the viability of gaming companies. The 28% GST is an obstacle on the road for players to making more money.
The platform fee imposed earlier was 18% GST. However, the gaming companies can protect their profit margins by transferring the burden of GST to the customers, but that will lead to a major fall in the number of subscribers and overall investment into the online gaming industry.
