The Central Board of Indirect Taxes & Customs (CBIC) in India has announced that online gaming will be subject to a 28% Goods and Services Tax (GST) rate starting from October 1, 2023. Sanjay Kumar Agarwal, Chairman of CBIC, explained that this decision follows the legal process, and all states are required to pass it in their respective assemblies or issue ordinances by September 30 for the 28% GST on online gaming to take effect.

Agarwal also mentioned that a review of the implementation of this 28% tax rate on online gaming will be conducted six months after its initiation. This move comes after the GST Council announced in July that bets placed in online gaming, horse racing, and casinos would be taxed at a 28% rate at full value.

Regarding the show cause notices sent to online gaming companies, Agarwal clarified that these notices are issued in accordance with legal provisions and are part of the department’s stance on the matter. The department aims for uniformity in the interpretation of the law.

Furthermore, Agarwal discussed the issue of fake input tax credit (ITC) in various sectors, including iron and steel. He mentioned that the problem is complex and that suggestions have been received regarding GST rates and reverse charge mechanisms (RCM). The GST Council’s decisions on return filing and registration processes are expected to help address these concerns. The government is actively working to combat the issue of fake ITC through various measures and verifications.

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