The GST legislation have been modified by the Cabinet to impose a 28% GST on internet gambling, casinos, and horse racing clubs

According to reports, the Union Cabinet approved modifications to the GST legislation on Wednesday that would impose a 28% tax on all bets placed in online gambling, casinos, and horse racing clubs.

It is expected that the GST Council-approved revisions to the Central GST (CGST) and Integrated GST (IGST) acts would be submitted during the current monsoon session of Parliament, which ends on August 11.


The GST Council suggested changes to Schedule III of the CGST Act, 2017, during its 51st meeting on August 2 in order to clarify the taxation on supplies made at gaming establishments such casinos, racetracks, and online casinos.


The Council also suggested including a clause in the 2017 IGST Act that would make offshore companies that conduct online gambling with real money subject to the GST. Such organizations will have to register for GST in India.


In the event that the conditions for registration and tax payment are not followed, the changes will also include measures for restricting access to online gambling platforms with foreign locations.


The revised GST legislation, which describe online gaming, online gambling for money, virtual digital assets used to purchase online games, and suppliers in the event of online gambling, will go into effect on October 1.


According to sources, the Union Cabinet approved the changes to the CGST and IGST rules during its meeting on Wednesday.


The Council, the highest decision-making body of the new indirect tax system, which consists of the Union finance minister and representatives of all states, decided on August 2 that 28% of the face value of low-stakes bets made at gaming platforms and casinos will be subject to GST.


Following the Council meeting, Finance Minister Nirmala Sitharaman said that the CGST and IGST reforms will likely be tabled during the monsoon session of Parliament. In their separate legislatures, the states will approve revisions to the state GST statute.


For platform fees/commissions ranging from 5 to 20 percent of the entire face value, the online gaming business and certain horse racing clubs now pay GST at a rate of 18 percent, while other horse racing clubs pay 28 percent on the whole face value.


Before several legal forums, they are contesting the 28% tax on claims that might be brought in the form of betting and gaming.


The current GST rate for gross gaming revenue (GGR) paid by casinos is 28%.


The whole face value of entry-level bets would be subject to a 28% GST, which would enhance GST receipts.