28% GST on online gaming, casinos, horse racing from Oct 1: CBIC

28% GST on online gaming

28% GST on online gaming: The Central Board of Indirect Taxes and Customs (CBIC) said it is fully prepared to implement the clarificatory laws related to uniform GST of 28% GST on online gaming, casinos and horse racing from October 1, 2023.

Based on the recommendations of the GST Council and the laws amended by the Centre and many States, tax will be applicable on the face value of the chips purchased in the case of casinos, bets placed with bookmaker/totalisator in the case of horse racing, and bets placed in the case of online gaming. Many online gaming companies have already been issued notices to pay 28 per cent GST instead of the 18 per cent charged currently.

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“We are fully prepared to bring it into effect from October 1. As per the decision taken in the last meeting of the GST council, the related notifications are under process,” Sanjay Kumar Agarwal, Chairman, CBIC, told reporters on the sidelines of an industry event. Though the Centre has already notified the clarificatory laws (CGST and IGST), it is yet to notify the appointed date. “GST council at its last meeting had decided it would be implemented from October 1. So if there is a requirement (for notification) it will be fulfilled,” he assured.

Further, Agarwal said all states must pass the law or come out with an ordinance. “All states will have to pass it by September 30,” he said. Sources said that except for the Union Territory of Delhi and the states of Tamil Nadu, Telangana and Punjab, all others have amended the SGST either through bills passed by the respective assemblies or through ordinance.

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Though the Centre has repeatedly said that clarificatory laws will not be implemented retrospectively, online gaming companies have said they are getting show cause notices (SCNs) for collecting taxes at the lower rate before the enactment. When asked about this, Agarwal said: “SCN is issued as per legal provision… it is part of the department’s stand. In the case of Dream11, the SCN is issued by the state, so I don’t know the amount.”

He also declined to specify the amount involved in the SCNs issued till date. “It is very difficult for me to say… there are many companies… data is being collected and wherever data is received the department has issued SCN,” he said.

At the last GST Council meeting it was also mentioned that a review will be held six months after implementation; the difficulties will be examined at that time, he said.

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