The Goods and Services Tax Council that met today (July 11) in New Delhi has bad news for online gaming companies. The council has agreed to levy a 28 per cent tax on online gaming, casinos and horse racing. The GST tax would be levied on full face value. The decision was made after its 50th meeting.
The 28% taxation has been in the offing for the gaming companies as the Group of Ministers (GoM) in their previous meeting had broadly agreed for the proposed taxes on the said activities, there was no consensus on online gaming as Goa proposed to impose only 18 per cent tax on platform fees. 28% is the highest GST tier.
The GST council also agreed that there should be no distinction between game of skill and game of chance. The effective date for 28 percent GST levy on online gaming will rollout after amendments to GST law.
The decision is not in favour of gaming companies who have been opposing 28% GST on online games. A group comprising some of the biggest online gaming companies represented by the FICCI Gaming Committee has urged the Central Board of Indirect Taxes & Customs (CBIC) not to hike the GST rate for the sector to 28 per cent. They have said that it would be “extremely detrimental to the survival of the online gaming industry as no business operations can survive with such high taxation.”
The 28% taxation has been in the offing for the gaming companies as the Group of Ministers (GoM) in their previous meeting had broadly agreed for the proposed taxes on the said activities, there was no consensus on online gaming as Goa proposed to impose only 18 per cent tax on platform fees. 28% is the highest GST tier.
The GST council also agreed that there should be no distinction between game of skill and game of chance. The effective date for 28 percent GST levy on online gaming will rollout after amendments to GST law.
The decision is not in favour of gaming companies who have been opposing 28% GST on online games. A group comprising some of the biggest online gaming companies represented by the FICCI Gaming Committee has urged the Central Board of Indirect Taxes & Customs (CBIC) not to hike the GST rate for the sector to 28 per cent. They have said that it would be “extremely detrimental to the survival of the online gaming industry as no business operations can survive with such high taxation.”
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