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Government is "fully prepared" to begin charging 28% GST on online gaming from October 1

Updated: Oct 7, 2023

Sanjay Kumar Agarwal, chairman of the Central Board of Indirect Taxes (CBIC), stated on Thursday that the government is "fully prepared" to impose a 28% goods and services tax (GST) on online gambling, casinos, and horse racing as of October 1.

Agarwal stated on the sidelines of a FICCI event that "the related notifications are under process" in accordance with the decision made at the most recent (51st) meeting of the GST Council. Regarding the potential for the Centre to delay its notice, the CBIC Chairman stated that the 51st GST Council meeting decided to examine the implementation of the 28% levy after six months, at which point challenges would be apparent.

Agarwal added that show-cause letters addressed to gaming companies for unpaid taxes were sent in accordance with the law.

Several online gaming enterprises have received notifications from tax authorities in recent weeks. The parent firm of Dream 11, Dream Sports, filed a writ case in the Bombay High Court on Tuesday to contest a GST notice alleging the evasion of allegedly Rs 25,000 crore. A tax notice for Rs 1,140 crore was also sent to Delta Crop last week on related grounds. The Karnataka High Court's decision to invalidate a GST notice against online gaming company Gameskraft for alleged tax evasion to the tune of Rs 21,000 crore was delayed earlier this month by the Supreme Court.

According to Agarwal, the states must now either approve the necessary laws in their state assembly or issue an ordinance in order to impose the GST rate.

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