Government: No retrospective tax on online gaming portals and casinos

New Delhi, Oct 8, 2023

The government on Saturday insisted that it had not resorted to retrospectively taxing online gaming portals and casinos and the action taken against such entities are in line with legal provisions.

At the GST Council meeting, Goa sought a review of the tax on casinos six months after it was imposed, while Delhi expressed concern over the impact of 28% tax on the gross value of bets on the industry.

Delhi's finance minister, Atishi, wanted the levy to be withdrawn, a demand she had made at the last meeting as well after backing the plan when the decision was taken after three years of consultations.

"Certain members had raised the issue of retrospective taxation. It was informed to them that this is not retrospective, and this was the law earlier. These liabilities already existed because online games were played with bets...

They were already attracting (28% GST) by way of betting or gambling," revenue secretary Sanjay Malhotra told reporters after the GST Council meeting.

Tax authorities have sent out notices, which according to estimates, adds up to close to Rs 1.5 lakh crore, asking gaming companies to cough up the dues. On their part, the companies are contesting the claims, with some approaching the court.The government has maintained that the tax was due and the gaming companies may be overstating the impact of the levy.

The new tax regime for online gaming, casinos and horse racing kicked in at the start of the month.

While the Centre has amended the law to arm itself with powers to impose the levy, Malhotra said that so far 18 states and union territories with legislature have made the necessary amendments to their respective state GST laws.

The remaining 13 are in the process of incorporating the amendments but the levy will kick in from October 1.

[The Times of India]