Is the Government Providing Tax Relief to Online Gaming Companies?
In a change of stance, the government has taken steps to offer some respite to online gaming companies. According to Finance Minister Nirmala Sitharaman, the government has opted to impose taxes on the overall funds deposited for playing online games, rather than on each individual bet, as reported by Reuters on Wednesday.
Last month, the government announced that it had decided to impose a 28 percent tax on the funds that online gaming companies collect from their customers for each bet.
Finance Minister Nirmala Sitharaman said on Wednesday that the decision to impose a 28 percent tax on the full face value of bets placed on online games will take effect from October 1, despite calls for a review by states such as Delhi and Goa.
The GST Council – the highest decision-making body for the new indirect tax system, comprising the Union Finance Minister and representatives from all states – discussed the language of changes needed to enable taxation of online gaming, he said after the panel meeting.
The panel, in its last meeting, had decided to levy 28 per cent GST on the full face value of bets placed, and Wednesday’s meeting was to discuss changes in the tax law that would be required to implement it.
Sitharaman said the Finance Minister of Delhi was opposed to a tax on online gaming, while Goa and Sikkim wanted a GGR (Gross Gaming Revenue) tax and not a face value.
However, Sitharaman said other states from Karnataka to Gujarat, Maharashtra and Uttar Pradesh wanted the decision taken in the last meeting to be implemented.
The new levy will come into effect from October 1 after necessary amendments are made to central and state laws, he said.
He added that the payment will be reviewed six months after its implementation.
(with agents’ income)
