Indian Government Imposes 28% GST on Gambling and Fantasy Sports Apps

The 50th meeting of the Goods and Services Tax (GST) Council was held on July 11, 2023. This meeting was presided over by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. During the meeting, the GST council as well a Group of Ministers provided recommendations for taxation of goods and services. Out of all the provisions, the one that caught everyone’s eye was the 28% tax on “Online Gaming”. Before we continue, it is worth noting that here this term refers to gambling and fantasy apps instead of actual video games that IGN India readers may be interested in.

GST charges increased for online gambling and fantasy apps in India

A Group of Ministers has been examining issues related to “taxation on casinos, horse racing and online gaming’. They have submitted two reports since then, the first in June 2022 and the second on July 11, 2023. Their latest report states that no consensus could be reached on the taxation of these services so the “GST council may decide”. The GST council then decided that all three, “Casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28%”

As highlighted at the start, gamers should know that taxation on online gaming here refers to online gambling and betting apps. These apps have long tried to mislead the non-gaming public into believing that they are the same as regular video games. The companies running such apps have even created a specific term called “skill-based games” to continue creating confusion.

According to the latest announcement, the 28% GST only applies to the skill-based games, which means online gambling titles. As pointed out by games industry analyst, Rishi Alwani, Nazara Technologies Limited shared a press release clarifying that once this taxation change is implemented, it will only apply to the “skill-based real money gaming segment” of their business.

Gambling companies continue to mislead everyone

Furthermore, prominent figures of the online gambling and fantasy industry have come out to call the new GST bracket things such as “unconstitutional, irrational, and egregious” with claims such as this will cause “irreversible damage to the industry and will only benefit “anti-national illegal offshore platforms”.

It looks like most of the segment is trying to create fear in public with this unnecessary exaggeration. The damage only comes to the “skill-based” online gambling titles and not the entire gaming industry that has been trying hard to drive the distinction between gaming and gambling.

This does impact the real money gaming sector in India as they will have to pay more under the new tax bracket. BharatPe founder, Ashneer Grover also took to Twitter to express his frustrations over the new taxation and how players are not going to put in money when the payout is close to nothing. Grover concluded stating “it was fun being a part of the fantasy gaming industry – which stands murdered now”.

IGN India believes that the government has taken a step in the right direction to tax companies and an industry that has caused irreversible harm to the Indian gaming sector. How do you feel about the latest taxation recommendations by the GST council? Share your thoughts in the comments section below.