Express News Service
NEW DELHI: The GST Council on Tuesday decided to tax online gaming at 28 per cent on full face value with no distinction between games of skill and chance. Casinos and horse racing will also be taxed at 28 per cent on the full face value of bets.
Finance Minister Nirmala Sitharaman said the decision is not to hurt the industry or states. “There is a moral question. Can we encourage them more than essential goods like food items? The GST Council discussed and understood the matter. It took a decision that had been pending for 2-3 years. The issue is very complex,” she stated. The government will have to make suitable amendments to include online gaming and horse racing in Schedule III as taxable actionable claims.
While the Centre’s decision will ensure a multi-fold increase in its revenue kitty, it will be catastrophic for the industry. “A tax burden where taxes exceed revenues will not only make the online gaming industry unviable but also boost black market operators. It is in addition to the loss of employment opportunities and the huge impact on marquee investors,” said Malay Kumar Shukla, Secretary, E-Gaming Federation.
The move can also have legal ramifications. “The announcements must have only prospective effect and any retrospective amendment will be subject to judicial review,” said Abhishek A Rastogi, founder of Rastogi Chambers, who is arguing several petitions for online gaming companies and casinos.
NEW DELHI: The GST Council on Tuesday decided to tax online gaming at 28 per cent on full face value with no distinction between games of skill and chance. Casinos and horse racing will also be taxed at 28 per cent on the full face value of bets.
Finance Minister Nirmala Sitharaman said the decision is not to hurt the industry or states. “There is a moral question. Can we encourage them more than essential goods like food items? The GST Council discussed and understood the matter. It took a decision that had been pending for 2-3 years. The issue is very complex,” she stated. The government will have to make suitable amendments to include online gaming and horse racing in Schedule III as taxable actionable claims.
While the Centre’s decision will ensure a multi-fold increase in its revenue kitty, it will be catastrophic for the industry. “A tax burden where taxes exceed revenues will not only make the online gaming industry unviable but also boost black market operators. It is in addition to the loss of employment opportunities and the huge impact on marquee investors,” said Malay Kumar Shukla, Secretary, E-Gaming Federation.googletag.cmd.push(function() {googletag.display(‘div-gpt-ad-8052921-2’); });
The move can also have legal ramifications. “The announcements must have only prospective effect and any retrospective amendment will be subject to judicial review,” said Abhishek A Rastogi, founder of Rastogi Chambers, who is arguing several petitions for online gaming companies and casinos.
