India imposes 28% GST to Online Gaming as Indian parliament has recently passed bill to impose 28% GST on online gaming, casinos and horse racing.
The domestic online gaming companies in India will be required to deduct 28% GST on bets placed from overseas locations. from now onwards.
The new rule will also be applicable to the foreign players and such bets will also be considered as actionable claims.
The recent amendment in the bill has been approved by Parliament in the Integrated GST (IGST) Act on August 11.
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The approval will apply the Central and Integrated GST laws to levy 28% tax on the full face value of bets in online gaming, casinos and horse race clubs.
After this recent amendment in IGST Act, the Government gets the power to notify such goods, so that in case of import of such goods.
From now onwards, the IGST can be levied and collected as regular inter-State supply under provisions of amended IGST Act.
Tax experts see this amendment as a correction in terms of collecting IGST from bets coming from overseas locations.
Now, the offshore online gaming firms will have to register their business or they can appoint proxy to pay the newly imposed tax.
Tax experts also revealed that overseas online gaming companies operating in India will be blocked if they fail to register or appoint a representative or a proxy to pay tax in the country.
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“Offshore online gaming companies will not enjoy any tax arbitrage, and would be treated at par with their domestic counterparts,” said Rajat Mohan, a partner at AMRG & Associates.
In perspective of the exponential growth of the iGaming sector and it is raising crucial questions about the industry’s future.
