GST on online games to fetch govt Rs20k cr

New Delhi The exchequer would get an estimated additional revenue of Rs20,000 crore annually following the decision of the GST Council to levy 28 per cent tax on full bet value on online gaming, said Revenue Secretary Sanjay Malhotra on Thursday.

The GST Council has unanimously decided to impose 28 per cent tax on online gaming, casino and horse racing, etc., he said adding that the government will pursue all cases in the Supreme Court for recovery of erstwhile tax demands. He said the online gaming industry is currently paying only 2-3 per cent GST which is even less than five per cent tax applicable on food items consumed by a common man.

“One of the members, in fact, in the GST Council pointed out that the way the online gaming companies are paying the taxes on online games at 18 per cent of GGR, which works out to only about 2-3 per cent, even lower than the tax rate of 5 per cent levied on many of the food products consumed by the very common people,” Malhotra told PTI in an interview.

The exchequer last year (FY2022-23) collected only Rs1,700 crore GST which could have been Rs15,000-20,000 crore had the tax been levied on the full value.

“But this (tax by online gaming companies) is on a much lower rate which the online gaming companies are paying. Our estimate is that it should be at least about 8 to 10 times this amount. So, if that is true, it should be about Rs15,000 to 20,000 crore annually, provided the volumes also sustain,” he said.

These companies took refuge under the differentiation of game of skill and chance and paid 18 per cent GST on only platform fees or Gross Gaming Revenue (GGR).