• Notification Date: 12-08-2023
  • Notification No: N/A

India's Union Cabinet approves Amendments to GST Laws

The Union Cabinet on Wednesday approved the amendments to the Central Goods and Services Tax Act that would enable the government to levy 28 per cent GST on online gaming, casinos and horse racing at the full value. 

According to sources, the amendments were approved at the meeting of the Union Cabinet chaired by Prime Minister Narendra Modi. They are likely to be tabled in the Parliament in the current session. 

The GST Council in its 51st meeting on August 2 had recommended certain amendments in the CGST Act 2017 and IGST Act 2017, including amendment in Schedule III of CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming. Online gaming would be considered an actionable claim for the purpose of levying GST. 

The Council, chaired by Union finance minister Nirmala Sitharaman, had also recommended insertion of a specific provision in IGST Act, 2017 to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India through a simplified registration scheme. In case of failure to comply with the registration for GST, the overseas online gaming portal would be blocked for use. 

The GST Council is keen on levying the tax from October 1 and the Centre and States are trying to complete the legislative process over the next two months. Once the amendments are passed, the rules will also be notified. 

However, with the current Monsoon Session of Parliament set to conclude on August 11, sources indicated that the Centre could consider promulgation of an ordinance if required. States where the assembly is not in session are also expected to promulgate an ordinance. 

The GST Council in its previous meeting on July 11 had decided to levy a 28% GST on online gaming, horse racing and casinos on the full value. Following concerns by the online gaming industry about the cascading impact of the tax, the Council also clarified that the tax would be levied on the contest entry amount net of winnings.