While Karnataka has delayed approving the draft ordinance for levying 28% GST on online gaming, the Goa state cabinet has approved their GST ordinance for the same along with, casinos and horse racing, on September 8.

As per section 2 of the Goa Goods and Services Tax Act, 2017, which has been amended to include the definition of online gaming describes it as any internet or electronic network-based game. It includes all the games where a user deposits money or money’s worth with an expectation of winning the game.

The provision also states that the providers of these online games – casinos, lotteries and horse race, betting, gambling will be referred as suppliers. The nature of the game here will not matter as both games of skill and games of chance, so the ones supplying the online games are liable to pay taxes.

The development is interesting as Goa was one of the few states, along with Sikkim and Delhi, that expressed concern on the new GST rate of 28% being levied at the full face value during the last GST Council meeting.

Goa houses a number of legal casinos both offshore and onshore. These casinos play a huge part in attracting tourists and generating revenue for the state exchequer, so the government’s protest seemed understandable.

Karnataka, on the other hand, supported the new GST rate, but there appears to be disagreement within the government. Incidentally, the draft ordinance will be presented again in the next cabinet meeting.

Union Finance Minister Nirmala Sitharaman has said that the situation will be re-evaluated in six months after the law is implemented. The new GST rate is planned to be implemented from October 1.

Despite that, the changes have come as a heavy blow to the online real money gaming industry. Few of the gaming platforms have completely halted their operations while some others have laid off employees.