GST Council Imposes 28% Tax on Online Gaming and Casinos

The decisions taken in the 50th GST Council meeting hold significant implications for various sectors, including online gaming, entertainment, and healthcare.

GST Council Imposes 28% Tax on Online Gaming and Casinos

New Delhi: In a landmark decision, the Goods and Services Tax (GST) Council announced its agreement to levy a 28 percent GST on the entire value of online gaming, horse racing, and casinos during its 50th meeting held today in New Delhi. This decision comes after the Group of Ministers (GoM) had previously approved the proposed tax in these sectors. However, the state of Goa expressed its disagreement with the tax on online gaming, suggesting an 18 percent tax on platform fees instead.

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One of the key points agreed upon by the GST Council is the elimination of any differentiation between games of skill and games of chance. This move aims to create a uniform tax structure across the gaming industry. The Federation of Indian Chambers of Commerce and Industry (FICCI) Gaming Committee, representing major online gaming companies, has appealed to the Central Board of Indirect Taxes and Customs not to increase the GST rate to 28 percent for the sector. They argue that such a high tax rate would impose significant pressure on the online gaming industry, stating that no business sector can survive under such burdensome taxes.

Revised Tax Structure for Movie Tickets and Cineplex Food Items

The GST Council also emphasized the sale of movie tickets and the provision of food items such as popcorn and cold drinks. It was agreed that when these items are sold together, the entire supply should be treated as a composite supply, and the tax should be determined based on the rate applicable to the original supply. In this case, the main supply refers to movie tickets.

As per the council's announcement, a 5 percent GST will now be imposed on restaurants located inside Cineplexes. This marks a significant reduction from the previous 18 percent GST rate applicable to such establishments. Additionally, prior to the change, a 12 percent tax was levied on movie tickets below Rs 100, while movie tickets above Rs 100 attracted an 18 percent GST.

GST Exemption on Cancer Drugs

In a move aimed at improving access to essential medical treatments, the GST Council decided to reduce the GST on imports of Food for Special Medical Purposes used to treat rare diseases and Dinutuximab, a cancer drug. Currently, a 12 percent Integrated Goods and Services Tax (IGST) is applicable to these drugs, but the council's decision will alleviate this tax burden.

The decisions taken in the 50th GST Council meeting hold significant implications for various sectors, including online gaming, entertainment, and healthcare. The implementation of a unified tax structure for online gaming and the reduction of taxes on cancer drugs reflects the council's commitment to promoting equitable taxation and facilitating access to vital medical treatments.