The Indian government has upheld the 28% GST rate on gambling despite concerns within the industry.
At the 54th GST Council meeting on September 9, Finance Minister Nirmala Sitharaman revealed that online gambling tax revenues surged by 412% in six months, reaching Rs 69.09 billion (€745.3 million).
The revised tax rate, covering both legal and illegal operators, came into effect in October 2023, prompting the withdrawal of bet365 and Super Group. Previously, the rate stood at 18%.
Sitharaman said: “We had taken this decision on casinos, online gaming and horse racing… at that time we said that we will come up with a status report six months later. That status was presented to the Council today.”
Casino GST revenues also saw a 30% increase during the same period.
Sitharaman emphasized that the council’s role was to assess the current landscape, with the report initially set for June but delayed.
It’s worth noting that Google shelved its RMG plans for the Indian Play Store shortly after the announcement.
The GST hike has sparked criticism, with claims it could hinder the growing skill-based gaming industry, which had been flourishing under recent regulatory reforms.
A joint report by Ernst & Young and the US-India Strategic Partnership Forum (USISPF), released in June, analyzed the tax’s impact on the sector.
The report said: “Despite its promising trajectory, the industry currently stands at a critical juncture faced with challenges exacerbated by the recent GST amendments and regulatory ambiguities.
“The impact of the amendment is evident from the declining active user base, widespread consolidation, closures, layoffs, and a growing trend of companies seeking operations abroad.”
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