Report: Govt to issue ordinance imposing 28% GST on online gaming

Published on:

With the finalization of new GST rate for online gaming, casino and horse racing, the central government may soon issue an ordinance to enforce the newly implemented 28% GST.

Finance Minister Nirmala Sitharaman, during the 51st GST council meeting, announced that the new law is expected to take effect starting October 1. Since the parliament monsoon session will be ending on August 11, the ordinance is likely to be issued soon.

The decision to levy 28% GST on full face value came as a near unanimous decision, with only Delhi, Goa and Sikkim expressing concerns on the topic. Due to this, the council has decided that the decision will be reviewed again after six months, starting the day it takes effect.

As per The Telegraph India, the GST council did not deliberate into the matter of amending CGST Law in the bill, the government can propose a supplementary list of business for specific legislation. Although sources said that there is no time to bring it up in the current session.

Starting August 8 to August 10, the session has been allocated for no-confidence motion debate. No other topic is to be discussed, and the ongoing businesses are to be suspended for the time being.

Companies relieved after GST being charged only on initial deposits

The decision to levy 28% GST will also be validated under the IGST Act, 2017 putting a liability on offshore companies providing real money gaming services in India. This provision will also provide a streamlined registration process for registration in India.

The GST council’s announcement to levy tax on full face value did come as a heavy blow to the online real money gaming sector. The companies claimed that the new tax will completely disrupt the growth of the gaming sector.

However, the companies were provided a small relief after the council decided to levy the tax on only the initial deposit and not on every subsequent cost entry amount. As of now, the effects of the decision are yet to be observed.

Related