The Goods and Services Tax Council of India has confirmed what the gambling industry has feared: the new 28 percent tax on casino gambling, online gambling and horse racing will come into effect from 1 October 2023.
The Council had a meeting on 9 August and clarified the future of the gambling tax that was first announced on 11 July. The GST Council also made it clear that the tax would be applied to the initial purchase of chips or on deposits made by a player and not on any amounts won.
Casino states such as Goa and Sikkim tried to persuade the council to apply the respective tax to gross gaming revenues instead, and casino operators also had the same approach. However, the GST Council rejected the calls and stood by its initial decision. The only concession made by the Council was that it agreed to review the success of the implementation of the new tax six months after 1 October 2023.
The E Gaming Federation and the Federation of Indian Fantasy Sports issued a joint statement in which they welcomed the clarification announced by the GST Council but insisted that the high tax rate would have a negative impact on the industry.
“The new tax framework, while clarifying and resolving uncertainty, will lead to a very burdensome 350% increase in GST and set the Indian online gaming industry back several years,” the respective statement read.
India’s current Good and Services Tax law will be amended during the current session of the country’s Parliament in order to allow the modifications to be implemented by 1 October 2023.