Understanding the Implications of the 28% GST on Online Gaming and Casinos in India

28% GST on Online Gaming

Introduction: 28% GST on Online Gaming

The 51st GST Council meeting held on 02 August 2023 saw a significant decision being taken to impose a 28% GST on online gaming in India. Finance Minister Nirmala Sitharaman announced that the implementation of this new levy is scheduled to begin from 1 October 2023. The decision came after extensive discussions among representatives from various states, each having distinct opinions on how to tax the burgeoning online gaming industry.

Background and Rationale for the 28% GST on Online Gaming:

The imposition of the 28% GST on online gaming and casinos is aimed at bringing these digital platforms under the tax net and generating additional revenue for the government. Online gaming has witnessed exponential growth in recent years, and the authorities have recognized the need to regulate and tax this sector effectively.

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Opposition and Differing Views:

During the GST Council meeting, the Delhi Finance Minister expressed opposition to the 28% tax on online gaming. However, states like Goa and Sikkim advocated for a tax based on Gross Gaming Revenue (GGR) rather than the face value of bets. On the other hand, states like Karnataka, Gujarat, Maharashtra, and Uttar Pradesh supported the decision taken in the previous meeting and wanted its immediate implementation.

Valuation of Supply and Taxation Methodology:

The council recommended that the valuation of supply for online gaming and actionable claims in casinos should be based on the amount paid or payable to the supplier on behalf of the player. This would exclude the amount entered into the games and bets from previous winnings, ensuring that only the actual transactions are subject to taxation.

Timeline for Implementation:

The Finance Minister mentioned that the required changes in central and state laws would be made to enable the taxation of online gaming. The new levy is expected to come into effect from 1 October 2023. However, the GST Council has also decided to review the implementation of the 28% GST on online gaming and casinos after a six-month period.

Impact on the Online Gaming Industry:

The introduction of the 28% GST on online gaming could have significant implications for the industry. Operators and players alike may need to adjust to the new taxation structure, and it might impact consumer behavior and spending patterns. There may also be concerns regarding compliance and administrative challenges for businesses.

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Road Ahead:

As the new taxation regime is implemented from 1 October 2023, the gaming industry stakeholders, including operators, players, and state authorities, will need to adapt and comply with the new tax norms. The GST Council’s review after six months will provide an opportunity to assess the impact and make any necessary adjustments to ensure a fair and effective taxation system for online gaming.


The decision to impose a 28% GST on online gaming and casinos represents a significant step by the Indian government to regulate and tax the rapidly growing digital gaming sector. While there are differing views among states on the taxation methodology, the council’s decision aims to bring uniformity and transparency to the taxation of online gaming. As the implementation date approaches, all stakeholders must prepare for the changes ahead and monitor the industry’s evolution under the new tax regime.

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