The Finance Ministry has notified October 1 as the date from which the 28 per cent GST rate for taxing online gaming, casinos and horse racing will come into effect.
The amended Central GST Act states that these supplies will henceforth be treated as ”actionable claims” similar to lottery, betting and gambling and subject to 28 per cent per cent GST on the full face value of bets.
The amendments to Integrated GST (IGST) Act makes it mandatory for offshore online gaming platforms to register in India and pay taxes in accordance with domestic law.
The 28 per cent GST will be applicable on bets placed in the case of online gaming, the face value of the chips purchased in the case of casinos and bets placed with bookmaker/totalisator in the case of horse racing.
According to the notification, the value of the supply of online gaming, including supply of actionable claims involved in online money gaming, shall be the “total amount paid or payable to or deposited with the supplier by way of money or money’s worth, including virtual digital assets, by or on behalf of the player”.
It has been provided that any amount returned or refunded by the supplier to the player for any reason, including the player not using the amount paid or deposited with the supplier for participating in any event, shall not be deductible from the value of the supply of online money gaming.
In the case of casinos, the value of the supply of actionable claims in a casino shall be the total amount paid or payable by the player for buying tokens, chips, coins or tickets.
The same will be applicable for the amount paid to participate in any event, including game, scheme, competition or any other activity or process, in the casino, in cases where the token, chips, coins or tickets are not required.
It has been provided that any amount returned or refunded by the casino to the player on return of tokens, coins, chips, or tickets, shall not be deductible from the value of the supply of actionable claims in the casino.
Parliament last month had approved the amendments to the Central GST and Integrated GST laws to give effect to the decisions taken by the GST Council.
The GST Council in its meeting in August had decided that the new provisions would come into effect from October 1.
A review of the implementation was proposed to be carried out after six months.