GST rates for online gaming to be discussed in GST council meeting in June

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In the latest update regarding tax rate for online gaming, GST council may discuss the report submitted by Group of Minister (GoM) back in December 2022. The GoM recommended 28% GST rate on online gaming both skill games and chance games.

The report was then planned to be discussed in the 49th GST council meeting but was delayed after Meghalaya’s Chief Minister Conrad Sangma was not able to attend due to state elections.

The GoM included Thiaga Rajan, Maharashtra Deputy Chief Minister Devendra Fadnavis, Finance Ministers of West Bengal (Chandrima Bhattacharya), Gujarat (Kanubhai Desai), Uttar Pradesh (Suresh Kumar Khanna), Telangana (T Harish Rao), and Goa Industries Minister Mauvin Godinho.

As of now the report is planned to be discussed in the upcoming meeting in June and will hopefully finalize the GST rate for online games. Another thing to observe will be to see if the GST is levied on the entry amount or Gross Gaming Revenue (GGR).

The gaming industry has highly favoured the GGR rate for the 28% GST rate which is considered the best way to ensure proper growth of the online gaming sector. As of now online skill-based games are taxed at a rate of 18% while games of chance are taxed at the rate of 28%.

The finance ministry also recently introduced a new tax deducted at source (TDS) on online gaming. According to the new TDS, all winnings for online games will be subjected to a tax rate of 28% at the time of withdrawal.

Minimum threshold for taxable winning have also been reduced to zero to avoid any for of tax evasion. Earlier the limit was Rs 10,000 which people used to evade paying taxes as the withdrawal done by them was usually less than Rs 10,000.