New tax rate on online money games kicks in
NEW DELHI : The new Goods and Services Tax (GST) regime of 28% tax on online money games, casinos and horse racing has kicked in from Sunday with Union government issuing orders on norms to be followed covering taxes to be collected by Centre and the Union Territories. Some states are in the process of notifying legislative changes for the part of taxes to be collected by them. The new regime kicks in amid intense litigation around the regime that existed till today with Supreme Court last month issuing a stay order on a Karnataka HC decision, favouring an online gaming company.
The finance ministry orders seek to implement GST Council’s decision to ensure that ‘the chance to win’ or ‘actionable claims’ supplied by online gaming platforms, horse racing clubs and casinos should be subject to 28% GST. Gaming companies have been resisting new tax regime saying it will make the industry unviable. The notifications issued by the Centre cover aspects like date of implementation, the value of the taxable service, GST return form and import of gaming as a service.
The new regime makes a clear distinction between casual online games and those involving a wager. Only actionable claims offered by ‘online money games’ are subject to 28% tax on full value of deposits made to the platform. Online money games are those in which the player deposits an amount in the expectation of winning some amount in a game or event.
The amendments do not affect the tax on casual online gaming in which no real money or betting or wager is involved. Experts advised that gaming platforms have to embrace the revised taxation regime. While most provisions for the revised taxability have been notified, ambiguity on some matters continues like
. Read more on livemint.com
