Govt notifies online money gaming, gambling, casino under Customs Tariff Act with NIL rate

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The central government this Saturday has notified specified actionable claims including online gambling and games as items with NIL rate under the heading 9807 of Schedule I of Customs Tarrif Act, 1975.

The goods which are exported from and imported into India are subject to imposition of tax as per the provisions of the Custom Act 1962, while the Customs Tariff Act 1975, specifies the rates at which duties of customs may be assessed on items imported into or exported from India.

Vide amendments to CGST Act 2017 in August 2023, a new section 14A was inserted to mandate tax payments by offshore gaming firms. The changes are effective from today. As GST provisions now recognise services offered by offshore gaming firms, the notification under Customs Tariff Act, 1975 appears to have been issued to clarify the applicable import duties for online games.

The Saturday’s notification classifies actionable claims into six different subcodes viz., betting, gambling, casinos, lottery, horse racing, and online money gaming. Incidentally, such a sub-classification is not available under GST as of now and industry body FIFS has sought separate SAC for online gaming distinct from betting and gambling.

As a fallout from government imposing 28% tax on offshore gaming firms, illegal betting platform Betway has shut operations in India.

The government officials have clarified that taxing offshore gaming entities does not mean the games offered by the entities are legal.

Indian firms including industry body AIGF have represented to the government number of times to control the menace of offshore gaming firms which flout laws and compete with legal compliant gaming entities and the recent changes are as a result of the same.

The central government also has notified 1st October as the effective date for implementation of 28% tax regime on full face value for domestic entities.