GST council postpones review of 28% levy on online gaming; likely to be taken up after Lok Sabha elections 2024
Mar 19, 2024
The 28% tax on online gaming was implemented on October 1, 2023, and was scheduled to be reviewed after six months
The Goods and Services Tax (GST) council on Tuesday postponed the review of the 28% levy imposed on the proceeds from online gaming, news platform NDTV Profit reported. The 28% tax on online gaming was implemented on October 1, 2023, and was scheduled to be reviewed after six months, but the people with knowledge of the matter have informed that this might be taken now after the Lok Sabha elections 2024.
The postponement comes after the Revenue Secretary's remarks last month, who said that the six-month period will be over by March 31, so the issue will be not decided in the next meeting, but after the completion of the deadline. “A review does not necessarily mean that we change the rates. A review is only to take stock and see if anything needs to be done," Revenue Secretary Sanjay Malhotra told Moneycontrol.
In its October meeting, the GST Council decided to impose a 28% levy on online gaming, casinos, and horse racing. The taxes that were levied on the full face value increased the government revenue fourfold from the sector.
The decision evoked a sharp response from the online gaming industry, who claimed that they would suffer huge losses due to the additional taxes. The heads of more than 125 online gaming companies wrote to the government explaining their grievances and the impact 28% GST can have on their business.
Union Minister assures reconsideration
After listening to several objections from the industry, Union Minister of State for Electronics and Information Technology Rajeev Chandrashekhar said that his ministry will request the GST Council to review their decision. “We will go back to the GST Council and may request their consideration on the facts of the new regulatory framework," the minister said during an interaction at the CNN-News18 Town Hall event.
“The GST Council is not the Government of India. The council is represented by all state governments. It is a federal organization. State governments and finance ministers have come together and created a GST framework. That is a consequence of three years of their work. While we may quibble with the findings, we have to recognize the process of creating a framework for online gaming, which started in January 2023," he said.
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