[Exclusive] 28% tax on online gaming: Govt to introduce GST amendment bills in Lok Sabha today

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The Centre is all set to introduce bills to amend the IGST and CGST laws for implementation of the new tax rate proposal of 28% on online gaming, casino and horse racing today. With the timeline to introduce the changes from October, the government requires to pass the bills in the ongoing monsoon Parliament session.

The most recent GST council meeting decided to levy 28% GST on full face value for initial deposits.

“Suitable amendments to be made to the law to include online gaming and horse racing in schedule III as taxable actionable claims,” the council recommend.

Further, it recommended inserting a specific provision in IGST Act, 2017 to bring offshore operators to tax ambit. “To provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India for the said supplier through a simplified registration scheme and also for blocking of access by the public to any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier in case of failure to comply with provisions of registration and payment of tax”.

States also require to amend their respective SGST laws for the proposals to be effective. This is expected to be undertaken once the Centre amends the CGST, IGST and UT GST laws. Some states may go through the option of introducing the changes by amendments.

The union finance minister said the changes will be reviewed after the initial six months.  Once the amendments are undertaken, clarifications are expected by way of rules.

In a related development, the central government this month filed a special leave petition in the Supreme Court challenging a Karnataka high court order that quashed a GST notice issued to Bengaluru based operator GamesKraft involving a demand of Rs.21,000 crores.