'Online betting & gambling subject to 28% GST, legalisation not on cards': Centre tells RS

Union Ministry of Finance stated on December 20 that re is no intention to legalise online gambling and that it is subject to 28% Goods and Services Tax (GST).

“Actionable claims in form of betting and gambling including those arising from online gaming attract 28% GST and GST Act does not make levy dependent on wher it is a game of skill or game of chance,” said Centre while answering to questions on online betting and gambling in Rajya Sabha. 

Union Ministry of Finance furr claimed that Directorate of Enforcement is investigating several cases related to cyber crimes and crypto assets-related frauds. Finance Ministry furr 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 se cases, as on 16.12.2022, proceeds of crime (PoC) amounting to ₹212.91 crores have been identified which stands attached / freezed / seized under provisions of PMLA. Also, 03 Prosecution Complaints have been filed in se cases,'' Finance Ministry stated in its response.

Centre constitutes task force to look into aspects of online gaming

Ministry informed that central government has formed an Inter-Ministerial Task Force (IMTF) to look into all aspects of online gaming regulation. 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 eir free to participate or involve real money in form of platform fees. 

Although re were some rumours regarding paying taxes on online gambling before GST Council meeting on December 17, Chief of Central Board of Indirect Taxes Vivek Johri clarified that re would only be a 28% GST in circumstances when winning will be contingent on a certain outcome.  

Congress leer and former Union Minister Shashi Tharoor, back in 2019, h introduced a private member's bill in Lok Sabha and proposed to bring regulations for online gaming sector. Member of Parliament from Thiruvananthapuram h said, " need of hour is a comprehensive regulatory framework, overseen by a competent regulatory body, to check flow of black money in online sports gaming, and to curb any illegal activities in connection with it."

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