Bihar has taken further steps to join the list of states that have implemented the 28% GST rate on online gaming as the state government on Monday, November 6 tabled an amendment bill in the assembly replacing the ordinance for the same.
In a statement to PTI, State Finance Minister Vijay Kumar Choudhary said, “The Union Ministry of Finance issued notifications for implementing 28 per cent uniform GST on online money games, casinos, horse racing, betting, gambling and lottery in September. The new tax regime has been in force in the state since October 1. Now the promulgated ordinance will be replaced by the amendment bill”.
The policy to increase the GST rate was initially announced back in July during the 50th GST Council meeting and the same was implemented by the Centre on October 1. However, many states are yet to follow suit but are slowly making progress towards it.
As per the new tax regime, the GST will now be levied on the full face value of the entry fee. Previously, online gaming companies were paying 18% GST on gross gaming revenue (GGR).
Apparently, the ultimate goal is to increase the tax revenue. Choudhary also agrees that increased GST rate will also result in increased revenue. However, online real money gaming companies have insisted that this would not be the case as players would stop using legitimate services due to higher tax and move towards illegal offshore betting platforms, resulting in revenue loss.
Prior to the implementation of the new GST regime, Bihar IT Minister, Israil Mansuri had also supported the online gaming companies saying that 28% GST on full face value will break the back of the industry.
He further added that GST on full face value will lead to the tax implication being more than the revenue earned by the company, making operating the business unsustainable.