The Finance Ministry is set to implement a 28% Goods and Services Tax (GST) on the face value at entry level for online gaming, casinos, and horse racing from October 1.
However, the progress of this move might face delays as not all states have passed the necessary legal amendments.
The Central Board of Indirect Taxes and Customs (CBIC) Chairman, Sanjay Kumar Agarwal, refrained from commenting on the potential delays arising from states yet to pass the required amendments. He emphasized that the government is ready to put the amended legal provisions into action by the stipulated date.
Every state must pass the necessary legislative amendments or ordinances in their respective Assemblies to implement the proposed changes in GST provisions for online gaming, casinos, and horse racing. The GST Council is scheduled to convene on October 7 to discuss the rollout of the online gaming provisions across states, along with potential rate proposals for milled health drinks and insurance products.
Regarding the recent tax notices, Agarwal emphasized that they are being issued in accordance with legal provisions. The government has taken a uniform stance in interpreting the law, leading to the issuance of these notices.
The GST Council, during its meeting on July 11, had decided to impose a uniform 28% tax on the full-face value for online gaming, casinos, and horse racing. However, due to concerns raised by certain states, the Council revised its decision during the 51st meeting on August 2, now imposing a 28% tax at face value at the entry level. Notably, the tax levy will not be imposed on the amounts entered into games or bets out of winnings from previous games or bets in online money gaming or on the total value of each bet placed, aligning with the approach taken in casinos.
Last month, the Centre passed the required legal amendments in the Central GST (CGST) and Integrated GST (IGST) laws in Parliament to enforce the Council’s decision. States are also required to enact corresponding legal changes in their State GST laws to bring this into effect. Currently, nearly a dozen states have passed the required amendments or ordinances. Some states, including Goa, Madhya Pradesh, and Maharashtra, have already passed ordinances. However, Karnataka has reportedly deferred its decision to approve the ordinance to the next Cabinet meeting.
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