The president of India gave assent to the laws seeking to amend Central Goods and Services Taxes (GCGST) and Goods and Services (IGST) Acts on Friday, August 18. The amendments are actually needed with regard to implementing 28% GST on online gaming, casinos, and horse racing.
With the proposed timeline for implementation (October 1) is less than two months away, the approval of President marks a crucial step in adhering to tentative timeline for implementation.
Union Finance Minister Nirmala Sitharaman tabled the bill in the Lok Sabha and Rajya Sabha on Friday (11 August), the final day of Parliament’s monsoon session. The Rajya Sabha returned the two proposed legislations to the Lok Sabha by voice voting just hours after the Lok Sabha cleared them.
State legislatures will now be required to assent amendments to state GST laws in their legislatures.
The GST Council had approved 28% GST on full face value of entry level bets in online gaming, casinos and horse racing. In the next meeting on August 2, the Council had then clarified that tax will be on the deposit amount by players.
The rapidly-expanding gaming industry labeled the new tax scheme as harmful to investment and job creation. To allay industry fears, the regime will be reviewed six months after it goes into effect.
A few online gaming portals, notably MPL, have already announced layoffs, citing the challenging environment created by the 28% GST. Spartan Poker has also cut down its workforce in light of the imminent tax change. Several other gaming companies are said to have gone for cost-cutting.
The amendments also make GST registration compulsory for overseas gaming platforms offering online money gaming services to Indian consumers and a special provision bringing tax liability on such platforms are part of the amendments. The move seeks to target online betting platforms, which are not physically present in India and are accused of evading hundreds of crores in taxes.