New Delhi, October 25: India's online gaming industry has received show-cause notices amounting to Rs 1 lakh crore say sources. The notices come even as the Industry has raised concerns on the applicable GST Rates. The government has asserted that a 28 per cent GST rate should have been in place starting from October 1, as per the law. In August 2023, the GST Council amended the law, making it explicit that all online games involving bets, regardless of skill or chance, would be subject to a 28 per cent GST rate on the full value of the bets placed, effective from October 1. This clarification aimed to close any potential loopholes.

The Central Board of Indirect Taxes and Customs (CBIC) Chairman, Sanjay Agarwal, announced India's preparedness to implement this 28 per cent GST rate on online gaming, following consensus among all Indian states. The amendments to GST laws in the Lok Sabha paved the way for this taxation shift. During its last monsoon session, the Lok Sabha passed amendments to two Goods and Service Tax (GST) laws. These amendments primarily aimed to introduce a 28 per cent GST rate for online gaming, casinos, and horse racing. Online Gaming Companies Get Rs 1 Lakh Crore GST Show Cause Notices So Far

The amendments align with the GST Council's resolution from August 2, which aimed to streamline the taxation of online gaming, casinos, and horse racing. Furthermore, to ensure compliance, the GST Council recommended adding specific provisions to the Integrated Goods and Services Tax (IGST) Act, 2017. These provisions encompass the liability to pay GST on the supply of online money gaming from foreign suppliers to Indian customers, along with measures to address non-compliance. Indian Government’s Online Gaming Reforms Must Gain Momentum To Arrest a Colossal Tax Loss of Rs 3.89 Lakh Crore, Says Study by Think Change Forum

The valuation of online gaming and actionable claims in casinos will be based on the amount paid or payable to the supplier, excluding previous winnings, ensuring a consistent and clear approach to taxation. India's endeavour to tax online gaming falls within the broader efforts to bring various sectors under the GST framework, ultimately aiming to streamline tax collections and clarify tax rates for these growing industries.

(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)