• Notification Date: 29-07-2023
• Notification No: N/A

GST Council to Possibly Clarify Definition of Online Gaming on August 2

The GST Council is likely to clarify the definition of online gaming, on which it had announced a 28 percent tax, during its next meeting on August 2, 2023, sources told CNBC-TV18 on Friday (July 28). The Council is also expected to include the new definition of 'online money gaming,' which will define games based on both skill and chance. Headed by Union Finance Minister Nirmala Sitharaman, the council is also likely to clarify on taxation of online games, casinos and horse racing. 

Online gaming means "an offering of a game on the internet or an electronic network and includes online money gaming," sources said about the likely definition of online gaming. On the other hand, online money gaming is likely to mean "games where players pay or deposit money or money's worth, including virtual digital assets, in the expectation of winning money". 

In addition to this, a new provision is also expected to be included for online money gaming supplied by a person located outside the taxable territory. The person will be included under the ambit of Integrated Goods and Services Tax (IGST). 

GST Council will also approve the blocking of all online gaming apps and platforms that do not comply with tax rules. 

The Council is likely to include “specified actionable claim” to include: 

(i) betting 
(ii) casinos 
(iii) gambling 
(iv) horse racing 
(v) lottery 
(vi) online money gaming 

It will likely deliberate on levying GST on the "total amount paid to or deposited with the supplier by way of money or money’s worth, including virtual digital assets, by or on behalf of the player" for online gaming, the sources said. 

For casinos, Council is to deliberate levying GST on the "total amount paid by or on behalf of the player for purchase of the tokens, chips, coins or tickets". 

The GST Council proposes to add a new provision for inserting definition of “virtual digital asset”, which will have the same meaning as considered in Income Tax Acts." 

The GST Council on July 11 decided to impose a 28% tax on the turnover of online gaming companies, horse racing and casinos.