The Goods and Services Tax Council of India has announced that it will impose a flat turnover tax for online gambling, casino and horse race betting amounting to 28 percent.
However, the Council has not yet announced when the respective tax rate will begin to be applied. In fact, in order for this tax rate to be enforced, the existing legislation would have to be amended.
According to the Goods and Services Tax Council, the new tax will be applied to the entire value of a bet and not on gross gaming revenue, and that would make it a turnover-based tax. For example, for every 100 Rupees spent by a customer, the online casino operator will have to pay 28 rupees to the state in tax.
In the case of online casinos, the tax will be applied to the total value of all bets received by an operator. For land-based casinos, the tax will have to be applied on the value of the chips that customers purchase at a gaming venue.
The decision comes after a report regarding taxation on gambling from a Group of Ministers was filed ahead of the Goods and Services Tax Council. The respective report, which was elaborated following a study which started in 2022, concluded that the Council should decide whether to apply the tax on turnover or gross gaming revenue.
The Goods and Services Tax Council is composed of representatives from all states and union territories in India and the Union Finance Minister is also a key part. The Council has the power to change tax rates and exemptions.
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