Government likely to issue Ordinance to impose GST of 28 per cent on online gaming

The government is expected to release an Ordinance for the imposition of a 28 percent GST on activities like online gaming, casinos, and horse racing. The window for amending the central GST and integrated GST regulations is quite tight, as the current monsoon session of Parliament concludes on August 11.

Nirmala Sitharaman, the Finance Minister, anticipates that the new taxes will come into effect from October after adjustments to both central laws and state GST regulations. She has mentioned that a reassessment of these new levies will occur after six months, due to reservations expressed by Delhi, Goa, and Sikkim.

In the current week’s agenda, there is no mention of the bill to amend the CGST Law. This topic remained untouched during the cabinet meeting held last week. However, officials have indicated that the government can present an additional list of matters for specific legislation, even if it wasn’t discussed in the business advisory committee (BAC) of the House.

Nonetheless, sources have emphasized that the government’s time is limited, making it impractical to introduce this legislation within the ongoing monsoon session. They have allocated three days, from August 8 to August 10, for a no-confidence motion debate. This debate will require the suspension of all other legislative matters.

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During this debate period, Rahul Gandhi, the reinstated leader of the Congress party, is expected to participate, and Prime Minister Narendra Modi will respond to the debate on August 10. The final day of the Monsoon session, Friday, is earmarked for discussions on Private Members’ Bills.

The government’s time for conducting its own business is quite restricted, following the question-hour and zero-hour sessions. The finance ministry has released a statement indicating that the GST Council, in its August 2 meeting, almost unanimously recommended changes to Schedule III of the CGST Act, 2017. These changes are meant to provide clarity on the taxation of activities like casinos, horse racing, and online gaming. These amendments will categorize all three as taxable actionable claims.

Additionally, a specific provision will be included in the IGST Act, 2017, to address the liability of paying GST on the supply of online money gaming by foreign suppliers to individuals in India. A simplified registration scheme will enable these foreign suppliers to obtain a single registration in India.

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