Monthly GST mop-up from online gaming companies jump 400% since Oct 1

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Monthly GST collections from online gaming companies have jumped over 400 per cent to about Rs 1,200 crore since October 1 when the 28 per cent levy on e-gaming platforms has come into effect, a senior official said on Friday.

The GST Council had in August last year clarified that online gaming companies will have to pay 28 per cent Goods and Services Tax (GST) on the full face value of bets placed on their platforms. Foreign e-gaming companies were mandated to register with the GST authorities, failing which their portals will be blocked.

The amendments to GST law came into effect from October 1, 2023.

“There has been a jump in GST revenues from online gaming companies post October 1. From monthly revenue of Rs 225 crore, the aggregate tax paid by the sector now stands at about Rs 1,200 crore,” the official told PTI.

GST officers had last year sent around 71 show cause notices to online gaming companies for alleged GST evasion of over Rs 1.12 lakh crore during financial years 2022-23 and 2023-24.

However, no overseas online gaming company has registered in the country since October 2023.

“These overseas companies keep changing their VPNs and change their websites when they are blocked. It is a challenge that the tax officers are facing,” the official added.

The spate of notices to online gaming companies follows the GST Council’s clarification in August that 28 per cent tax would be levied on full value of bets placed on online gaming platforms.

GST Council is chaired by the Union finance minister and comprises finance ministers from all states and Union Territories.

Online gaming companies have been approaching High Courts against such GST demands contesting the claims of revenue authorities. These companies claim they were paying taxes at the rate of 18 per cent as games played on their platforms were ‘games of skill’.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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