28% GST applicable on Online Gaming and Casinos from very beginning

As states such as Delhi and Goa raised the issue of retroactive taxation on online gaming companies and casinos, Revenue Secretary Sanjay Malhotra reiterated on Saturday that 28% GST was already levied on online gaming and casinos.

“Some members raised the issue of retroactive taxation. It was explained to them that this is not retroactive, and that this was the law previously. Because money online games were played with bets, these liabilities already existed…They were already attracting (28%) GST through betting or gambling,” Malhotra told reporters.

Delhi and Goa raised the issue of tax demands on e-gaming companies and casinos at the 52nd GST Council meeting.

Tax notices for the previous six years calculated at a much higher rate of 28% are being sent to online gaming companies, despite the fact that this 28% GST was to be implemented on October 1.

“You are slapping a tax notice of Rs.1.5 lakh crore on an industry with a revenue of Rs.23,000 crore…this is to kill the industry. This demonstrates an unsafe and erratic investment environment in Indian startups,” said Atishi Marlena.

Malhotra went on to say that some states, including Delhi and Goa, have raised concerns about online gaming companies receiving GST demand notices for alleged evasion.