Review of 28% levy on Online Gaming Sector is postponed by GST Council; can happen after Lok Sabha Elections 2024

Introduction-

In one of our article "GST Council decides to levy 28% GST on Online Gaming w.e.f. Mar 31: Revenue Secretary" we have discussed the possibility of increasing GST on Online Gaming from 18% to 28% after Mar 31st, as per the statements given by Revenue Secretary Mr. Sanjay Malhotra. He further added that review of the GST on online gaming will not take place until next meet because the six-month period gets over on Mar 31. So, may be the GST Council meeting after than can discus this matter.

New Update on this topic came into light that this review of 28% levy on Online Gaming is now postponed and it likely to be happen after Lok Sabha Elections. The tax on Online Gaming was implemented on Oct 1st, 2023 and it was supposed to be reviewed after six months but there is an ambiguity of meeting now and possibly this meeting can happen after Lok Sabha elections 2024.

GST Council postpones the review until after the polls-

The review of levy 28% GST on online gaming has been deferred until after the completion of elections. The new update is now in the light. The GST Council meeting is expected to be happen after the polls, due to the current enforcement of the model code of conduct following the announcement of the election scheduled by the Election Commission of India.

Lok Sabha Elections 2024-

Lok Sabha elections are scheduled to be conducted in seven phases over a span of 44 days starting from Apr 19, followed by vote counting begin on Jun 4. According to MOM of GST Council meet Aug 2023, this increase of GST from 18% to 28% will be reassessed and its implementation on casinos, online gaming and horse racing will be reviewed after six months.

Requirements for Implementation from 18% to 28%-

During the implantation on Oct 1, 2023, there was also a requirement for offshore gaming platforms to register, with possibility of being blocked if they failed to comply with the provisions outlined in the Information Technology Act.

After the registration regulation done for offshore entities, the government has already blocked more than 60 platforms that did not obey the stipulated mandate nearly a month ago, it has been disclosed by an official on the condition of anonymity. Moreover, actions to block non-compliant platforms are currently underway.

Conclusion-

Revenue Secretary Mr. Malhotra said that after four months of implementation of three months of revenue collection, the government has found out a substantial enhancement in revenue from the Online gaming sector. He further added that in the last three months preceding Oct 1, government got revenues of only Rs. 605 crore in comparison. Therefore, this spike of 5 times is now the hope to get a revenue of about Rs. 13,000-14,000 crore if government can maintain the same pace. He stated that the projected revenue from Online gaming sectors was estimated at Rs. 1,600 crore for the last financial year, indicating an annual increase of Rs. 12,000 crore in the current economic year.