'Online betting & gambling subject to 28% GST, legalisation not on cards': Centre tells RS
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The Union Ministry of Finance stated on Tuesday that there is no intention to legalise online gambling and that it is subject to a 28% GST.
The Union Ministry of Finance stated on December 20 that there is no intention to legalise online gambling and that it is subject to 28% Goods and Services Tax (GST).
“Actionable claims in the form of betting and gambling including those arising from online gaming attract 28% GST and the GST Act does not make the levy dependent on whether it is a game of skill or game of chance,” said the Centre while answering to questions on online betting and gambling in Rajya Sabha.
The Union Ministry of Finance further claimed that the Directorate of Enforcement is investigating several cases related to cyber crimes and crypto assets-related frauds. The Finance Ministry further stated that in a few cases, it has been noticed that online betting and gambling sites/apps have been used for money laundering and hawala transactions. ''In these cases, as on 16.12.2022, proceeds of crime (PoC) amounting to ₹212.91 crores have been identified which stands attached / freezed / seized under the provisions of PMLA. Also, 03 Prosecution Complaints have been filed in these cases,'' the Finance Ministry stated in its response.
Centre constitutes task force to look into aspects of online gaming
The Ministry informed that the central government has formed an Inter-Ministerial Task Force (IMTF) to look into all aspects of online gaming regulation. The GST Council has also constituted a Group of Ministers (GoM) on casinos, race courses, and online gaming to examine all issues of rate and valuation of activities casinos, race course and online gaming.
Online games of skill include e-sports, fantasy games, rummy and poker or chess. Such games are either free to participate or involve real money in the form of platform fees.
Although there were some rumours regarding paying taxes on online gambling before the GST Council meeting on December 17, the Chief of the Central Board of Indirect Taxes Vivek Johri clarified that there would only be a 28% GST in circumstances when the winning will be contingent on a certain outcome.
Congress leader and former Union Minister Shashi Tharoor, back in 2019, had introduced a private member's bill in the Lok Sabha and proposed to bring regulations for the online gaming sector. The Member of Parliament from Thiruvananthapuram had said, "The need of the hour is a comprehensive regulatory framework, overseen by a competent regulatory body, to check the flow of black money in online sports gaming, and to curb any illegal activities in connection with it."
