The bill which aims to impose a 28 per cent Goods and Services Tax (GST) for online gaming, casinos and horse racing was passed without any debate.

On Friday, the last day of Parliament Monsoon session, Union Finance Minister Nirmala Sitharaman introduced the Central Goods and Services Tax (Amendment) Bill, 2023. The bill which aims to impose a 28 per cent Goods and Services Tax (GST) for online gaming, casinos and horse racing was passed without any debate.

With the Rajya Sabha returning the bill on Friday afternoon, the way ahead for the bill was cleared. Now, the states will have to make the needed legislative changes to their GST laws for the levy of 28% to set in, along with the amendments to the Central and GST laws passed by the Lok Sabha.

Last week, the amendments to the Central GST (CGST) and Integrated GST (IGST) laws were approved by the GST Council. The amendments to the bill provide for the insertion of a provision in the Schedule III of the CGST Act, 2017, to give clarity on the taxation of supplies in casinos, horse racing and online gaming.

The amendment in IGST Act provides for the inserting a provision to impose GST liability on online money gaming offered by offshore entities. Online money gamers provided by offshore entities would now need to get GST registration in India. Any failure to comply with the registration and tax payment, would lead to the blocking of access to such online platforms stationed overseas.

October 1 has been specified as the date for the tax roll out. The finance minister has assured of a review or assessment of the levy. The online gaming sector has been growing fast and has been termed as detrimental for jobs and investments. With the introduction of the levy, some online gamming firms have already announced lay-offs and closures. The future prospects of such business seem cloudy now as the levy falls on the full-face value of entry level bets (in online gaming, casinos and horse racing).