Congress MP Questions Ministry of Finance Over 28% Tax on Online Gaming

On 11^th July, the GST (Goods and Service Tax) Council during its 50^th meeting decided to levy a uniform 28% tax on the full face value of online gaming, casinos, and horse racing.

The decision has not been met with unified satisfaction across the board. During the 51^st meeting of the GST Council held on 2^nd August, Delhi's Finance Minister - Atishi Marlena Singh, opposed the new tax measure but BJP's (Bharatiya Janata Party) Central Government refused to reconsider.

This was followed by Manish Tewari, MP of Anandpur Sahib and Member of Indian National Congress (INC), questioning the Ministry of Finance on various topics related to 'GST on Casino, Horse Racing, and Online Games'.

Ministry of Finance Responds to Manish Tewari's Questions Related to 28% Tax on Online Gaming

A total of five questions were asked by Manish Tewari which were as follows,

1. Is the Government engaged in any discussions related to the imposition of 28% tax on online gaming?

2. Has the Government deliberated on the potential harms and loss of employment that may arise due to 28% tax on the online gaming sector?

3. Will the 28% tax be applicable on all online games, regardless of whether they involve skill or chance?

4. Does the Government intend to treat online skill-based games the same as gambling, poker, and other chance-based games?

5. Has the Government come up with a definition to categorize games involving skill and games involving chance?

A response was provided to all these questions on 31^st July by Pankaj Chaudhary - Minister of State in the Ministry of Finance.

• In reference to the first two questions (1 and 2), the response stated after detailed deliberations on 11^th July during the 50^th meeting of the GST council, it had been clarified that actionable claims supplied in casino, horse racing, and online gaming are leviable to a GST rate of 28%.

• In reference to the next two questions (3 and 4), the response stated that the above rule shall be applicable irrespective of whether the underlying activities are a game of skill or chance.

• In reference to the last question (5), no response was provided as the need for it does not arise.

Upon receiving the above-mentioned response, Manish Tewari went on to state that just like the Government killed the cryptocurrency ecosystem in the country by imposing a 1% TDS (Tax Deducted at Source) and 30% tax on gains which were charged under income from other sources, now it was doing the same with the online gaming industry by imposing 28% GST on full face value.

"Something is terribly wrong with the Government's tax theology and it's much-touted focus on innovation and startups," said Manish Tewari.

Earlier, it was reported by Atishi that despite the Delhi Government vehemently opposing the decision to impose a 28% tax on online gaming during the 51^st meeting of the GST Council, the Central Government had refused to reconsider it.