May request GST Council to reconsider 28% online gaming tax: Rajeev Chandrasekhar

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In a recent interview today, Minister of State for Electronics & Information Technology Rajeev Chandrasekhar stated that he might request the GST Council to reconsider its decision to levy 28% tax on online gaming.

He explained that the decision to apply the tax at full face value was suggested by all the state governments that make up the Council. Earlier, he had backed the decision and called it a “well-thought-out preliminary measure” which was a consequence of three years of work.

“Goods and Services Tax (GST) Council is not the Government of India. The council is represented by all state governments. It is a federal organization. State governments and finance ministers have come together and created a GST framework. That is a consequence of three years of their work. While we may quibble with the findings, we have to recognize the process of creating a framework has started in January 2023,” Chandrasekhar said as quoted by News18.

While Chandrasekhar has not promised he would definitely ask the Council, the mere fact that he has said so would mean a lot to the industry at this stage because the Centre’s stance has been firm going by Revenue Secretary Sanjay Malhotra’s comments.

Notably, Malhotra clarified that the 28% tax rate will be levied on real money games and casual gaming, esports titles or any other form of gaming will not be affected.

The new GST rates were decided on July 11 at the 50th meeting of the Council. It did not differentiate between games of skill and chance and levied tax at 28% on full face value on online gaming, casinos and horse racing.

The online gaming industry has raised several concerns, claiming that the tax policy will take a heavy toll on them. They further said that several of the entities might have to cease operations, resulting in layoffs and will push players/users to offshore illegal betting websites.