The Government of Kerala is now following the footsteps of other Indian states, as it recently proposed an Ordinance to amend the state GST Act. The Ordinance is in line with the central government’s latest dictations of GST rates. If accepted, the GST on activities like online gaming, casinos and racecourses will be charged at the new rate of 28%.

The Ordinance also provides for clarity on taxation on the aforesaid activities and will clear the doubts regarding the actual taxation. As per the Union dictations, tax will be charged on the full face value, as compared to 18% previously. The ordinance is then expected to be passed as a bill in the next assembly session.

According to The Hindu, many firms in the industry have asked a reconsideration on the implemented GST rates. To which, the Nirmala Sitharaman-led GST Council has announced that the new rates will be re-evaluated within six months of its implementation.

Till then, the gaming companies will have to work as per the directed GST rates. Experts have opined that 28% GST will have a significant impact on the growth of the sector till re-evaluation. In case the rates remain unchanged, the sector will experience a degrowth. Further, the experts said that this can also delay the government’s plans to build a trillion dollar economy.

Notably, the increased tax is not the only burden RMG companies are going through. The Directorate General of GST Intelligence (DGGI) has handed tax evasion notices to 71 companies in the sector. The amount of these notices has touched a whopping Rs 1.12 lakh crores. Multiple companies have also filed a plea against these notices, which can make or break the real-money gaming industry.