Starting from October 1, there will be a 28 percent tax imposed on the full face value of bets placed on online games, despite calls for a review from states like Delhi and Goa, according to finance minister Nirmala Sitharaman. The GST Council, which consists of the Union finance minister and representatives from all states, discussed the necessary amendments to enable the taxation of online gaming during their panel meeting.
The panel had previously decided to impose a 28 percent GST on the full face value of bets. Wednesday’s meeting focused on deliberating the changes to tax laws needed for the implementation of this decision.
Sitharaman stated that the finance minister of Delhi opposed the tax on online gaming, while Goa and Sikkim preferred levying the tax on gross gaming revenue (GGR) instead of the face value. On the other hand, other states such as Karnataka, Gujarat, Maharasthra, and Uttar Pradesh supported the implementation of the decision made in the previous meeting.
Once the necessary changes are made to both central and state laws, the new tax levy will likely take effect on October 1. Sitharaman also mentioned that a review of the tax will be conducted after six months of its implementation.
Last month, India caused a stir in the nascent online gaming industry by imposing a 28 percent tax on the funds collected from customers for every bet, alarming global investors supporting the industry.
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