GST Council recommends amendments in GST law for taxing supplies in casinos, horse racing and online gaming

This Tax Alert summarizes the recent press release^[1]  issued by the Ministry of Finance on recommendations made by the Goods and Services Tax (GST) Council in its 51st meeting regarding taxation of supplies in casinos, horse racing and online gaming.

The Council in its 50th meeting had recommended that actionable claims supplied in casinos, horse racing and online gaming may be taxed @28% on full face value^[2] . Accordingly, it has now recommended the following amendments:

• Amendments in Central Goods and Services Tax Act, 2017 (CGST Act) and Integrated Goods and Services Tax Act, 2017 (IGST Act) to provide clarity on taxation of the said supplies.
  
• Insertion of specific provisions in GST law to provide for:
  
  • Liability to pay tax on supply of online money gaming by a supplier located outside India to a person in India,
    
  • Single registration for such supplier through a simplified scheme, and 
  • Blocking of public access to information in any computer resource used for supply by such person in case of failure to comply with the above requirements.
• Amendment in Central Goods and Services Tax Rules, 2017 (CGST Rules) to provide that valuation of supply of online gaming and actionable claims in casinos shall be basis the amount paid/ deposited with the supplier (excluding the amount entered into games/ bets out of winnings of previous games/bets).
  

It was decided by the Council to complete the process of carrying out the above amendments at the earliest and bring them into effect from 1 October 2023. .

[1] Press release dated 2 August 2023
 [2] Refer our alert “GST Council recommends 28% tax rate for online gaming and clarifies ISD is not mandatory” dated 12 July 2023