The 28% GST (Goods and Service Tax) applied to real money online gambling activities in India officially came into force on October 1, 2023, and many have said that it would be the death knell for the iGaming industry.
Let’s dive straight in to find out just how much of an impact the government’s decision to implement this new tax region has had at online casinos, sports betting sites, and other legally permitted real money gambling websites.
Summary
Here is a brief summary of the key points:
● In August 2023, the GST Council in India announced that all real money wagers placed on horse racing, lotteries, and gambling websites, including Indian online casinos, sports betting sites, and other similar websites, will levy a 28% Goods and Service Tax at full value, to be collected by the operator of that site
● India’s 28% GST regime on the full amount being paid at the entry level for online gaming that was eventually issued by the finance ministry came into effect on October 1, 2023
● GST payments now made by licensed and regulated iGaming operators have increased by around 1,000%, marking the death knell for the industry, causing businesses to close/pull out of the market, and increase unemployment
Understanding the 28% Goods and Service Tax
The newly implemented GST regime on gambling activities in India is said to be part of a much broader effort by state and central government authorities to better regulate the real money gambling industry, which had been likened to the Wild West with very few controls.
The new ruling came into effect after the Goods and Service Tax Council approved both the Integrated Goods and Services Tax (Amendment) Bill and the Central Goods and Services Tax (Amendment) Bill. The central government in India also approved both Bills.
The tax hikes correlated with a provision in the 2017 Schedule III of the GST Act. It would offer transparency on the taxation of supplies in online gaming, horse racing, and casinos.
There is no differentiation between games of skill and chance in India, and the new regime has forced several globally renowned iGaming companies to exit the iGaming industry in India altogether.
What are the most notable changes?
Let’s take a quick look at an example of how these new changes affect an online casino. If a player spends INR 100 playing their favorite online slot machine, a GST of INR 28 will be levied on that wager under the new ruling.
Before the new ruling came into effect, only an 18% GST was applicable on top of the platform fee charged for games of skill.
In other words, under the previous tax system in India, if the platform fee was 20% of the wager (i.e., INR 20), the Goods and Service Tax would have been just INR 3.6% (which is 18% of INR 20).
The new tax hike equates to somewhere in the region of a whopping 1,000% increase, which significantly increases the cost of gambling online. The move has been met with fierce criticism and great disappointment from operators and players.
It has made online gambling activities unviable and has led to a rise in people living in India switching to offshore licensed iGaming sites that fall outside of Indian jurisdiction, where operators and players aren’t taxed in such a steep way.
It has severely impacted the iGaming industry in India because players cannot continue gambling with such increased tax liability. In short, the iGaming industry in India is now up in arms, and the future is uncertain.
Where can I find out more about today’s most trusted Indian iGaming sites?
Despite the negative impact on the industry and the huge setback this has caused for players, there are still many reliable sites out there that cater to the Indian market.
For more information about today’s most trusted Indian online sports betting casinos, one of the most trusted iGaming review sites you can turn to in 2024 is the official TheTopBookies.com website.
All of their carefully handpicked online casinos and sports betting sites are legally permitted to accept real cash wagers from people living in India.
They welcome several popular Indian online payment options and Indian rupees, and they can be accessed from most modern smartphones, tablets, laptops, and desktop computers, provided you are aged 18 or above.