The Finance Minister Nirmala Sitharaman presided over a meeting of the Goods and Services Tax (GST) Council that was held by videoconference on August 2^nd, 2023. Following are some highlights of the GST meeting.

• Most gamers won’t be able to bear the higher tax burden of 400–500%. The online gaming industry will be badly impacted by value on deposits, which will make it such that the majority of players—including MSMEs—would no longer be able to survive in the face of the 400–500% rise in tax liabilities. Only well-established and entrenched skill gaming businesses may be able to survive this transition by utilizing their current capital reserves to offset the consequences of a significantly higher tax burden. However, even their earnings and market value will decline sharply.
• Taxing internet gaming won’t make it lawful where it’s currently illegal.
• The GST at 28% will only be applied to the cash or equivalent deposits made by players to start a game on an online gambling platform, not to winnings that are transferred to other games. While this will undoubtedly provide some relief to the online real money gaming industry, many smaller start-ups in this sector risk still being severely harmed once this higher GST takes effect—some of them possibly even before the expiration of the review period of six months as mentioned in the press briefing.
• If offshore gaming enterprises are functioning without paying taxes, a monitoring unit under the Directorate General of GST Intelligence (DGGI) is being established to keep an eye on them.
• If the introduction of the 28% casino tax and online gambling reforms results in modifications, the GST laws need not be amended.

Casino and internet gambling will now be subject to a 28 percent tax, according to Finance Minister Nirmala Sitharaman. She noted that the Council had addressed how, if a tax of 28 percent is imposed on gross gaming revenue (GGR), the net income would only be 11 to 12 percent, so the value of supply of online gaming and actionable claims in casinos will be on the entry-level. With the current GGR of 18 percent, net revenue is between 8 and 9 percent. According to FM Sitharaman, the GST Act amendments would be discussed during this Parliamentary session. She continued by stating that the Council has decided to evaluate the GST on online gambling six months after implementation, which is expected to happen on October 1st, 2023.