What is 28 GST on online gaming?

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this artical all details What is 28 GST on online gaming ,The landscape of online gaming in India has undergone a significant shift with the imposition of a 28% Goods and Services Tax (GST) on casinos, online gaming, and horse racing. Finance Minister Nirmala Sitharaman’s recent clarification on the prospective application of this GST has sparked discussions and debates within the gaming industry. In this article, we delve into the implications of this tax, its specific provisions, and the reactions from industry experts and stakeholders.

What is 28 GST on online gaming

Understanding the 28% GST:


The announcement of a 28% GST on online gaming platforms has raised concerns and questions among both industry players and enthusiasts. The tax, applicable prospectively from October 1, 2023, focuses on entry-level bets. This means that the GST will be levied on the initial amount invested in online gaming platforms, excluding winnings. The clarification aims to address ambiguities regarding the retrospective application of the tax and provides insights into how it will be implemented moving forward.

What is 28 GST on online gaming

Finance Minister’s Clarification:


Finance Minister Nirmala Sitharaman’s clarification on the GST came during a discussion on the GST (Second) Amendment Bill in the Lok Sabha on December 19. She emphasized that the new valuation norms, effective from October 1, would apply the 28% GST to entry-level bets. Importantly, this clarification seeks to exclude winnings from the valuation for tax purposes. However, it remains to be seen how this will impact existing tax notices and ongoing litigation within the gaming industry.

Industry Reactions:


The online gaming industry in India has responded to the GST imposition with a mixture of apprehension and optimism. While the clarification regarding prospective application provides some relief, concerns linger about the potential impact on past tax periods and ongoing litigation. Industry experts emphasize the need for further clarity and potentially seek a review by the GST Council after six months of implementing the levy.

Shilpy Chaturvedi, a Partner at Deloitte India, points out that the gaming industry, grappling with unique business challenges due to the GST, may turn to the courts for a final interpretation of the valuation for past periods. This uncertainty underscores the industry’s cautious optimism as it navigates the complexities of the new tax regime.

Ankur Gupta, Practice Leader – Indirect Tax at SW India, highlights that the clarification may influence gaming companies for previous tax periods, applying the valuation method introduced only from October 2023. Gupta explains that, as a prospective amendment, bets placed from winning amounts will not be eligible for exclusion before October 2023.

What is 28 GST on online gaming

Ongoing Challenges for the Gaming Industry:

Diverse gamer group with african ethnicity female players playing competitive computer game in a gaming room. Wearing headset and talking into the microphone to communicate with the pro team and the coach.


The online gaming industry has been actively working to offset the impact of the 28% GST on its operations. The industry’s concerns extend beyond the tax rate itself, with specific challenges related to the exclusion of winnings and the potential financial burden on gaming companies. Tax notices have been a point of contention, with 71 show cause notices issued to online gaming companies during the fiscal years 2022-23 and 2023-24 (up to October 2023). These notices involve significant amounts of goods and services tax, totaling Rs 1,12,332 crore.

What is 28 GST on online gaming

Looking Ahead:


As the online gaming industry grapples with the implications of the 28% GST, stakeholders eagerly await further clarity and potential revisions after the initial six-month period following the levy’s implementation. The industry’s proactive efforts to understand and address the challenges posed by the new tax regime reflect its commitment to navigating the evolving regulatory landscape in India.

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