The Goods and Services Tax (GST) Council, in a government decision, decided to amend central and state laws from 1 October to ensure that 28% GST is paid on the full value of amounts deposited by players for betting on online games, casinos, and horse races.
The GST Council will make no distinction between the ‘game of skill’ (fantasy sports, for example) and the ‘game of chance’ (betting on horse races, gambling, casinos, and so forth).
A fixed GST rate of 28% will be levied on a ‘gross revenue’ basis, that is, on the total stake value rather than just the platform fee paid.
From 1st October 2023 GST amount is calculated as below:
| Add Money | 100 |
| GST | 21.875 |
| Amount Reflected in Wallet | 78.125 |
FAQ
Q. Why is GST applicable on deposits?
A – The GST Council in the 51st meeting held on 2nd August 2023, under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman, decided to levy a 28% tax on the full value of money supply, i.e, deposits made by individuals on online gaming platforms.
Q – How does GST apply to online gaming?
A – Starting October 1st, when you make a deposit, there will be a 28% charge applicable on the full value of the deposited amount.Here’s a sample calculation for your reference: When you input an amount of ₹100 on the ‘Add Cash’ page, you will get ₹78.125 as your Deposit Amount, with the GST on that amount being ₹21.875 (28% of ₹78.125).
Q – What is the GST rate applicable on online gaming?
A – The GST rate of 28% will apply on the full value of deposit amount.
Q – Can I claim input credit on GST paid on deposit?
A – You cannot claim a refund for the GST paid on online gaming platforms when filing your GST returns. This is because input tax credit can only be claimed if the goods or services purchased are used for business purposes and not for personal use.
Q – How is GST different from TDS?
A – GST is applied to the value of supply in the context of real money gaming. The value of supply pertains to the money that users deposit in their wallet to participate in various contests.On the other hand, TDS of 30% is deducted from the net winnings when users withdraw funds to their bank account. You can use the TDS certificate to claim credit for the TDS deducted while filling your income tax return.