GST on Online Gaming

'The GST rate on casinos, race course and online gaming has been subject of much discussion. The online gaming market especially has been growing remarkably, currently is estimated at USD 2.2 billion. The emergence of several unicorns in this space also highlights the potential of this segment. Currently, the GST rate on online gaming falls within 2 slabs - 18% and 28%. Online games that involve betting and/or gambling attract 28% GST while other online games, where no betting and/or gambling is involved are taxed at 18%. Online gaming platforms which typically earn commission are also liable to pay GST at the rate of 18% on their commission. There are, under GST, several issues related to classification and valuation of these services, which were discussed during the meeting of Group of Ministers (GoM) headed by Meghalaya Chief Minister Conrad K Sangma. The Ministers had unanimously decided to recommend levying 28% GST on all forms of online gaming, casinos (including online casinos) and race courses. This recommendation is pending before the GST Council. A higher GST rate of 28% as against 18% would have an impact on the profitability and pricing of the online gamers, and many players may need to pass on these rate hikes to their loyal community of online gamers. It would be interesting to also understand the GoM's recommendations on certain types of online gaming such as online learning games, trivia quizzes etc. which assist in education and distance learning.'