Lok Sabha Passes GST Amendment Bills To Levy 28% Tax On Online Gaming And Casinos

On Friday the last day of monsoon session of Parliament finance Minister Nirmala Sitharaman introduced bills in the House.
The Lok Sabha adopted changes to the Central and Integrated GST rules on Friday that will impose a 28% tax on all bets placed in online gaming, casinos, and horse racing clubs.

On Friday, the final day of the monsoon session of Parliament, Finance Minister Nirmala Sitharaman tabled bills in the House amidst opposition protests over the suspension of Congress leader Adhir Ranjan Chowdhury.

Amendment bill

The Lok Sabha approved the Central Goods and Services Tax (Amendment) Bill, 2023 and the Integrated Goods and Services Tax (Amendment) Bill, 2023 by voice vote and without discussion. Assemblies in the various states will now pass the revisions to the state GST statutes.

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The changes concern the addition of a clause to Schedule III of the CGST Act, 2017, which clarifies the taxation of supplies used in horse racing, casinos, and online gaming. The IGST Act was amended to include a clause imposing GST responsibility on online gambling services offered by foreign organizations. Such organizations would have to register for GST in India.

In the event that the provisions for registration and tax payment are not followed, the changes will also include provisions for restricting access to online gambling platforms with foreign locations.

The GST Council last week approved the changes to the Central GST (CGST) and Integrated GST (IGST) rules.
The council had authorized the imposition of a 28% GST surcharge on the full face value of all initial wagers made in online gambling, casinos, and horse racing.

The proposed changes

The proposed amendments include adding provisions to Schedule III of the CGST Act, 2017, with the intention of providing clear standards for the taxation of transactions in gaming establishments such as casinos, racetracks, and online casinos.

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Similar to this, an amendment to the IGST Act aims to impose GST requirements for foreign companies involved in online gambling by requiring them to register for GST in India.
In addition, the changes contain clauses that, in cases of non-compliance with registration and tax payment obligations, would prevent access to offshore online gaming sites.

The GST Council approved these changes to the Central GST (CGST) and Integrated GST (IGST) rules the week before.
It’s noteworthy that the council approved the introduction of a 28% GST on the total nominal value of first-level wagers made in the online gambling, casino, and horse racing industries.