India’s GST Council Retains 28% Tax on Online Gambling and Casinos
India’s Goods and Services Tax (GST) Council has announced that it will retain the current 28% turnover tax on online gambling, casino operations, and horse race betting.
Indian flag, India’s 28% tax on gambling turnover to remain following review.
LISTEN TO THIS ARTICLE:The decision comes after a six-month review of the tax increase that was implemented in October 2023. India’s Finance and Corporate Affairs Minister, Nirmala Sitharaman, said in a press briefing that online gambling revenues surged by 412% between November and April, reaching ₹6909 Crore ($823 million) in the six months following the tax change. Revenue from land-based casinos also climbed 30% over the same period and reached ₹1214 Crore ($25.5 million).
Questions Regarding Industry’s Adaptability
Sitharaman was evasive when asked whether the revenue growth indicated that the industry had adapted to the higher tax.
The council heard the facts and that’s where it was left. It was more a presentation of the current situation. That was a promise that was given to review [the regime] after six months. It’s been more than six months now and we have given a picture [of the sector].
Industry stakeholders had raised concerns about the potential negative impact of the high tax rate, especially when the review was delayed during the GST’s June meeting, which frustrated those in the sector.
Rajat Bose, a partner at Shardul Amarchand Mangaldas & Co Advocates & Solicitors, explained that the online gambling industry “was eagerly looking forward” to the GST council meeting with the hope that some of their concerns would be addressed.
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High Gambling Tax Rate Slows Industry Growth
The economist and former Indian government official Dr. Aruna Sharma believes that the “heavy taxation” will ultimately be passed to players.
A report from EY and the US-India Strategic Partnership Forum also found that the tax increase has had a negative effect on the industry. It concluded that the Indian gambling sector had drawn in $2.6 billion in foreign investment since 2019. However, no new capital has been raised since the tax hike was enforced.
The GST Council, made up of Sitharaman and representatives from all Indian states and union territories, holds the authority to set tax rates, decide on exemptions, and manage administrative rules.
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