GST on Online Gaming: Kerala Govt assents to GST Amendment Ordinance

Kerala Govt assents to GST Amendment Ordinance to Facilitate GST on Online Gaming at 28%
Online gaming GST - Kerala GST amendment - Kerala gambling laws - Arif Mohammed Khan - Gaming taxation in Kerala - GST on gambling - taxscan

On Friday, Kerala Governor Arif Mohammed Khan granted approval to an ordinance modifying the state Goods and Services Tax (GST) law concerning gambling, according to sources familiar with the situation.

During the 50th GST Council meeting, a 28% GST on gambling at casinos, horse racing, and online platforms was established, specifying that the tax would be imposed on the face value of the bet. Subsequently, the central government officially notified the amendment to the GST Act, leading the Kerala government to promulgate the Ordinance, introducing changes to the state GST law.

In a significant step towards regulating online money gaming and gambling, the Kerala government cabinet has proposed an ordinance to amend the Kerala Goods and Services Tax (KGST). This decision was finalized during a cabinet meeting held at Rama Nilayam in Thrissur on December 6.

The move aligns with the Union Finance Ministry’s September decision to implement a uniform 28% Goods and Services Tax (GST) on online money gaming, casinos, and horse racing.

The Union Government’s decision, in accordance with the 50th GST Council’s resolution, imposed a 28% GST on the full face value of transactions related to online gaming, casinos, and horse racing. This prompted State Governments to make corresponding amendments to their respective State GST laws. In line with this, the Kerala government is proactively addressing the tax implications of online money gaming and gambling within the state.

Earlier, Finance Minister Nirmala Sitharaman clarified that the 28 per cent Goods and Services Tax (GST) on entry-level bets on online gaming platforms will be applicable prospectively, with valuation rules excluding winnings.

Read More: Finance Minister Clarifies Prospective Application of 28% GST on Online Gaming Bets, Excludes Winnings from Valuation Rules

Addressing the Lok Sabha during discussions on the GST (Second Amendment) Bill, which includes age limit caps for GSTAT president and members, Sitharaman emphasized that confusion should be avoided regarding the taxation of online gaming.

Responding to a question in the Rajya Sabha about tax evasion and show cause notices to online gaming companies, Minister of State for Finance Pankaj Chaudhary had stated on December 5, “71 show cause notices involving GST to the tune of Rs 1,12,332 crore have been issued to online gaming companies during financial years 2022-23 and 2023-24 (up to October 2023).”

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates