Clarity on taxation of supplies in casinos, horse racing and online gaming
The GST Council in the 50th meeting held on 11.07.2023 had deliberated on the Second Report of the Group of Ministers (GoM) on Casinos, Racecourses and Online Gaming and had recommended that the actionable claims supplied in Casinos, Horse racing and Online gaming may be taxed at the rate of 28% on full face value, irrespective of whether the activities are a game of skill or chance.
The Council had also recommended that the law may be amended to provide clarity in the matter.
Recommendation of GST Council in its 51st meeting:
Issuance of certain Amendment /Notification as below:
- Certain amendments related to said matter in the CGST Act 2017 and IGST Act 2017
- Amendment in Schedule III of CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming.
- CGST Rules, 2017 may be amended to insert specific provisions for valuation of supply of online gaming and supply of actionable claims in casino.
- It was also decided by the Council that effort will be made to complete the process of making amendments in the Act at the earliest and bring the amendments into effect from 1st October 2023.
Liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India
- The Council recommended to insert a specific provision in IGST Act, 2017 to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India for the said supplier through a simplified registration scheme.
- Also for blocking of access by the public to any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier in case of failure to comply with provisions of registration and payment of tax.
Valuation of Supply :
Valuation of supply of online gaming and actionable claims in casinos may be done based on the amount paid or payable to or deposited with the supplier, by or on behalf of the player (excluding the amount entered into games/ bets out of winnings of previous games/ bets) and not on the total value of each bet placed.
- The Council proposed amending the CGST Rules, 2017 to include specific provisions for the valuation of supply of online gaming.
- These provisions will help determine the taxable value of online gaming services for GST purposes.
- The GST Council recommended taxing actionable claims supplied in casinos at the entry level.
- This decision aims to streamline the taxation of casinos and ensure compliance with GST regulations.
Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of the stakeholders. The same would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.
Our detail article on 28% GST on Online Gaming Industry – 50th GST Council meeting decision. – RMPS (rmpsco.com)
Press release can be accessed from Press Information Bureau (pib.gov.in)
This Article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update etc. if any.
