Within a week of notifying an ordinance to implement 28% GST on online gaming, casinos, horse racing, Karnataka GST authorities have written to 161 online gaming firms asking them to comply with the new GST policy and file returns accordingly.
“We have done this to be doubly sure that they collect taxes as per the new rate diligently, and not continue with 18% GST as before. We don’t want any company to claim later that they were not aware of the details of the recent amendments to the GST laws,” a senior official said as per The Economic Times.
All online gaming firms will now have time till November 20 to pay taxes collected at the revised rate and file returns for transactions occurred in October. State commercial taxes commissioner C Shikha believes that annual revenue might go up by Rs 1,500 crore due to the new GST rate.
However, not every state will be able to enforce the new GST rate as many of them have not amended their GST laws yet. Previously, the 18% GST was divided as 9% Central GST (CGST) and 9% State GST (SGST).
The shift to 28% GST rate brings both CGST and SGST to 14% each after the recent implementation from October 1. The states that are yet to implement the same will only see SGST applicable at 9% while CGST will be levied at 14%.
Meanwhile, online gaming firms had requested for a reconsideration of the GST Council’s decision to levy 28% tax on the industry when it was announced on July 11. Finance Minister Nirmala Sitharaman, however, offered to review the effects of the new rate after six months from implementation.
Raising concerns on the increased GST rate, Karnataka Information Technology and Bio Technology minister Priyank Kharge had also thoroughly criticized the decision of the Council claiming that a blanket ban without distinguishing between skill games and chance games will only harm the online gaming industry.