India's Finance Ministry notified October 1, 2023 as the appointed date for amended Goods and Services Tax provisions covering e-gaming, casinos and horse racing, according to The Hindu1. The ministry issued the notification late on Friday, September 29, 2023, ahead of the Sunday start date2.
Under the changes to the Central GST Act, these supplies are treated as "actionable claims" similar to lottery, betting and gambling, and are subject to 28% GST on the full face value of bets1. The GST Council, made up of central and state finance ministers, approved the amendments at meetings in July and August 2023, and Parliament passed changes to the Central GST and Integrated GST laws the following month1.
The Integrated GST amendments require offshore online gaming platforms to register in India and pay tax under domestic law, and provide for blocking access to overseas platforms that fail to comply with registration and payment rules2. Rules for valuing these supplies were notified on September 6, 20232.
"The Finance Ministry has now notified that October 1 will be the appointed date for implementation of these provisions."
The All India Gaming Federation wrote to Revenue Secretary Sanjay Malhotra asking how companies registered in states that have not amended their own GST laws should treat deposits from players there, and requested that the notifications be suspended until all states pass their amendments2. The Hindu reported that around 15 states had yet to make those changes2. KPMG's Abishek Jain said ambiguity remained on classification of supplies, time of supply and transition provisions2.
| Item | Detail |
|---|---|
| Tax rate | 28% GST on full face value of bets1 |
| Applies to | Online gaming, casinos, horse racing1 |
| Effective date | October 1, 20231 |
| Offshore platforms | Must register in India and pay tax; access can be blocked for non-compliance2 |
| Valuation rules notified | September 6, 20232 |
| Review proposed | After six months, April 20241 |
What it means for players
The tax is levied on the full value of the bet rather than the platform's commission, so operators must account for 28% of every stake placed1. How much of that reaches players through higher entry fees, lower prize pools or changed game formats has not been reported. Offshore platforms that do not register face the prospect of access being blocked in India2. The notification applies to central law; in states that have not amended their own GST statutes, the treatment of deposits from players in those states was unresolved at the time of the notification2.
What happens next
A review of the implementation was proposed for after six months, in April 20241. The Supreme Court listed a matter concerning a High Court order for a hearing on October 10, 20232. The Hindu reported that online gaming companies including Dream11 and casino operator Delta Corp had received GST show cause notices that month for alleged short payment of taxes, and that GamesKraft received a notice in September 2022 for alleged GST evasion of Rs 21,000 crore2.
For background on how operator taxes reach players, see Betting Duty, GST and Casino Tax: How Operator Taxes Reach Players and Tax on Gambling Winnings in Asia. For the wider legal picture, see Gambling Laws in Asia: What Is Legal in 12 Jurisdictions and Recent and Pending Gambling Law Changes in Asia.
