28% GST on Online Gaming

According to a recent update, GST Council has recommended 28 per cent rate at full face value for online gaming, casinos and horse racing.

• The GST council contains members from both Centre and States. 

Key recommendations:

• 28 per cent rate will be applicable each time one is buying chip or placing bet.
• This has nothing to do with winning or losing, adding that services provided will attract taxes separately.
• The Council also decided to exempt import of cancer drugs and food for special needs from GST.
• However, food and beverages bought separately in a cinema hall is to attract GST at the rate of 5 per cent.
• The Council also recommended setting up of mechanism for appellate tribunals from August 1.
• Demands for state-wise benches were presented by various states, and the Council approved setting up of as many as 40 benches in phases.
• The cess will be imposed on any utility vehicles of 1500 cc and above engine capacity, length of 4 metre and above and unladen ground clearance of 170 mm. (not for sedans.)

Defining the Terms:

• Online Gaming: Online gaming is simply the playing of a video game over the internet, usually with friends. Online games can be played on any number of devices from dedicated video games consoles such as PlayStations, Xboxes, and Nintendo Switches, to PCs, laptops and mobile phones.
• Casinos: A casino is a facility for certain types of gambling. Casinos are often built near or combined with hotels, resorts, restaurants, retail shops, cruise ships, and other tourist attractions.
• Horse Trading: It is a widespread metaphor for complex bargaining or other transactions, such as political vote trading.

Other clauses for Online Gaming:

• The Centre has introduced a new clause, Section 194BA, in the 2017 Union Budget to tax a user’s net wins from online gaming at the end of the fiscal year.
• In addition, the government has added a new Section 115BBJ to tax winnings. According to this section, the income tax calculated on net wins from online gaming over the preceding year will be 30 per cent.
• TDS will be levied on gains of less than Rs 10,000.