28% Goods and Services Tax (GST) on online gaming will start being imposed from Sunday i.e. October 1. Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Aggarwal has given this information. He has said that a legal notice has been sent to the gaming companies as part of the process for this.
Sanjay Aggarwal has said that the Legislative Assemblies of all the states should pass the GST Amendment Bill 2023 by September 30 or bring an ordinance and implement it from October 1. He said that the result will be reviewed after 6 months of its implementation.
The GST Council had announced imposing 28% GST on online gaming, horse-racing and casinos in July. The final decision on this was taken in the 51st meeting on August 2.
Currently, most online gaming platforms pay 18% GST. Casinos, betting and other such games which involve 'chance' are subject to 28% GST. In horse riding or horse racing, the government charges 28% GST on the stake value (per betting).
40 crore people of the country play online games. By 2025, this industry is expected to be worth 5 billion dollars i.e. about ₹ 41 thousand crores. Domestic mobile gaming industries grew at a rate of 38% annually between 2017-2020. The pace of growth of this industry is the fastest in the world. After India, China and America's gaming growth is 8% and 10%.
Many big companies including TCS and Infosys are in the online gaming sector. Experts believe that about 1 lakh people associated with this sector may become unemployed.
Under the amendment of IT Act-2021, the government considers all games of chance as gambling. The government will identify and close all games of chance in a phased manner.
The government wants to carry out special monitoring of gaming and gambling. Gaming and gambling that put children and adults at risk are being identified.