28% GST on Online Gaming and more – Key Highlights of the 50th GST Council Meeting

The 50th Meeting of the GST Council took place on July 11, 2023, in New Delhi, with Smt. Nirmala Sitharaman, the Union Finance & Corporate Affairs Minister, serves as the chairperson. In commemoration of this milestone, the esteemed chairperson unveiled a short video film titled ‘GST Council- 50 steps towards a journey’ in the presence of council members. The film showcases the council’s journey and has been produced in Hindi, English, and various regional languages, which will be available on multiple social media platforms. Additionally, special covers and customized ‘My Stamp’ were presented to the chairperson and council members by the Chief Post Master General, Delhi.


During the meeting, the GST Council made several recommendations concerning changes in GST tax rates, trade facilitation measures, and compliance streamlining in GST. Here are the key recommendations:

  • Uniform taxation of online gaming, casinos, and horse racing. The Council decided to levy a uniform rate of 28% on the full face value of bets and wagers made on these activities. This will bring parity in the taxation of these activities and make it easier for businesses to comply with the law.
  • Exemption of imported drugs to treat cancer and rare diseases from GST. The Council decided to exempt these drugs from GST to make them more affordable for patients. This is a welcome move that will benefit patients who need these essential medicines.
  • Setting up of 50 Benches of the GST Appellate Tribunal. The Council approved the appointment and service conditions for tribunal members and the president. The tribunals are expected to become operational within four to six months. This will help to reduce the backlog of cases in the GST Appellate Tribunal and provide faster relief to taxpayers.
  • Clarification of tax rates on some goods and services. The Council clarified the tax rates on a number of goods and services, including uncooked or unfried snack pellets, special utility vehicles, and food for special medical purposes. This will help to provide clarity to taxpayers and businesses about their tax obligations.

The burgeoning online gaming industry, valued at $1.5 billion, has experienced a significant surge in popularity in recent years, attracting foreign investments.  However, the recent imposition of a 28% Goods and Services Tax (GST) on gaming companies has raised concerns about its impact on their ability to invest in new games, cash flow, and business expansion.

On the one hand, it is understandable that the government would want to tax this growing industry. After all, online gaming is a form of entertainment, and entertainment is typically taxed at a higher rate. Additionally, the government may see this as a way to generate revenue to support other government programs.

On the other hand, it could be argued that the 28% GST is too high. It is likely to discourage people from playing online games, and it will also make it more difficult for the gaming industry to grow.  Additionally, GST, ideally could have been differentiated based on the type of game. For example,  skill-based games should be taxed at a lower rate than chance-based games.

Apart from the above, various other changes were discussed – here are some more details-

Changes in GST Tax Rates:

I. Recommendations related to GST rates on Goods

A. Changes in GST rates of goods

  1. The rate on uncooked/unfried snack pellets will be reduced to 5%, and the payment of GST on these snack pellets for the past period will be regularized on an “as is basis.”

B. Other changes related to goods

  1. IGST exemption will be provided on Dinutuximab (Quarziba) medicine when imported for personal use.

  2. IGST exemption will be provided on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases listed under the National Policy for Rare Diseases, 2021, when imported for personal use, subject to existing conditions. Similarly, IGST exemption will also be extended to FSMP when imported by Centres of Excellence for Rare Diseases or any recommended person or institution by the listed Centres of Excellence.

  3. It will be clarified that the supply of raw cotton, including kala cotton, by agriculturists to cooperatives is taxable under the reverse charge mechanism, and past issues related to this will be regularized on an “as is basis.”

  4. The GST rate on imitation zari thread or yarn will be reduced from 12% to 5%, and the payment of GST related to this matter for the past period will be regularized on an “as is basis.”

  5. The entry for utility vehicles exceeding certain parameters will be amended in the compensation cess notification, and an explanation will be provided for the term ‘Ground Clearance.’

  6. The GST rate on LD slag will be reduced from 18% to 5% to promote better utilization of this product and environmental protection.

  7. Trauma, spine, and arthroplasty implants’ issues for the period prior to 18.07.2022 will be regularized on an “as is basis” due to genuine interpretational issues.

  8. The GST rate on fish soluble paste will be reduced from 18% to 5%, and the payment of GST on fish soluble paste for the past period will be regularized on an “as is basis.”

  9. The issues related to desiccated coconut for the period from 1.7.2017 to 27.7.2017 will be regularized on an “as is basis” due to genuine interpretational issues.

  10. For pan masala, tobacco products, etc., where declaring the retail sale price is not legally required, the earlier ad valorem rate applicable on 31st March 2023 will be notified for the levy of Compensation Cess.

  11. RBL Bank and ICBC bank will be included in the list of specified banks eligible for IGST exemption on imports of gold, silver, or platinum, as per Annexure 4B (HBP) of Foreign Trade Policy 2023.

  12. Consequential changes will be made in notifications in view of the new Foreign Trade Policy 2023.

  13. The issues related to GST on plates and cups made of areca leaves prior to 01.10.2019 will be regularized.

  14. The issues related to GST on biomass briquettes for the period 01.7.2017 to 12.10.2017 will be regularized.

II. Recommendations related to GST rates on Services

A. Changes in GST rates of services

  1. The GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL) may be extended to such services supplied by organizations in the private sector to encourage startups.

B. Other changes related to services

  1. Goods Transport Agencies (GTAs) will no longer be required to file a declaration for paying GST under the forward charge every year. If they have opted for this option in a particular financial year, it will be deemed that they have opted for it for the next and future financial years, unless they declare their intention to revert to the reverse charge mechanism (RCM).

  2. The last date for GTAs to exercise the option to pay GST under the forward charge will be 31st March of the preceding financial year instead of 15th January.

  3. It will be clarified that services supplied by a director of a company to the company in their private or personal capacity, such as renting immovable property, are not taxable under the RCM. Only services supplied by a director of a company or body corporate in their capacity as a director will be taxable under the RCM.

  4. The supply of food and beverages in cinema halls will be taxable as a restaurant service as long as they are supplied as part of a service and independently of the cinema exhibition service. When the sale of cinema tickets and the supply of food and beverages are bundled together as a composite supply, the entire supply will attract GST at the rate applicable to the exhibition of cinema.

III. Second Report of Group of Ministers (GoM) on Casinos, Race Courses, and Online Gaming

The GoM submitted its second report to the GST Council, recommending that online gaming, horse racing, and casinos be taxed at a uniform rate of 28% on the full-face value of bets placed. The council deliberated on the issues and approved the recommendations.

Measures for Facilitation of Trade:

  1. The Council recommended the Rules governing the appointment and conditions of the President and Members of the proposed GST Appellate Tribunal to ensure the smooth functioning of the tribunal. It was also recommended that the provisions of the Finance Act 2023 pertaining to the GST Appellate Tribunal be notified by the Centre from 01.08.2023. Additionally, the Chief Secretary of Maharashtra will be nominated as one of the members of the Search cum Selection Committee. The establishment of State Benches will be initiated in a phased manner.

  2. The relaxations provided in FY 2021-22 for various tables of FORM GSTR-9 and FORM GSTR-9C will continue for FY 2022-23. Exemption from filing annual returns (FORM GSTR-9/9A) will be continued for taxpayers with an aggregate annual turnover up to two crore rupees for FY 2022-23.

  3. The Input Services Distributor (ISD) mechanism will not be mandatory for the distribution of input tax credit of common input services procured from third parties to distinct persons. A circular will be issued to clarify this and other related issues.

  4. Clarity will be provided through a circular regarding GST liability and the reversal of input tax credit in cases involving warranty replacement of parts and repair services during the warranty period, stating that no GST will be charged by the manufacturer on such replacements and no reversal of input tax credit is required.

  5. A circular will be issued to clarify refund-related issues, including the restriction of refund of accumulated input tax credit based on FORM GSTR-2B, the inclusion of export goods’ value in the calculation of “adjusted total turnover,” and the admissibility of refunds in cases where exports or realization of payment for export happens after the time limit provided under rule 96A of CGST Rules.

  6. A circular will be issued to clarify the TCS liability under Sec 52 of the CGST Act, 2017 in cases where multiple E-commerce Operators (ECOs) are involved in a single transaction.

  7. Rule 46 of CGST Rules will be amended to require only the name of the State of the recipient, rather than the full address, on the tax invoice in cases of supply of taxable services through an ECO or by a supplier of OIDAR services to an unregistered recipient.

  8. Issuance of various circulars to provide clarity on issues related to GST, including e-invoicing requirements, calculation of interest liability, and taxation of holding securities by a subsidiary company.

  9. Amnesty schemes for non-filers of returns, revocation of registration, and deemed withdrawal of assessment orders will be extended till 31.08.2023.

  10. Due dates for filing FORM GSTR-1, FORM GSTR-3B, and FORM GSTR-7 for the months of April, May, and June 2023 will be extended for registered persons in the State of Manipur till 31.07.2023 due to the prevailing law and order situation.

Measures for Streamlining Compliances in GST:

  1. A rule will be inserted in CGST Rules to mandate e-way bill generation for the intra-state movement of gold and precious stones under Chapter 71, as recommended by the Group of Ministers (GoM).

  2. Special measures will be introduced for capacity-based taxation and a special composition scheme for manufacturers of tobacco, pan masala, and similar items, including registration of machines, filing of special monthly returns, and penalties for non-registration of machines.

  3. Amendments will be made to strengthen the registration process and address fraudulent registrations in GST, including the requirement to furnish details of a valid bank account, system-based suspension of registration, and amendments to the physical verification process.

  4. A pilot project will be conducted in Puducherry for risk-based biometric-based Aadhaar authentication of registration applicants.

  5. Mechanisms will be introduced to address differences in input tax credit (ITC) between FORM GSTR-2B and FORM GSTR-3B, including system-based intimation and auto-compliance by taxpayers.

  6. Notice will be issued to registered taxpayers who fail to file their Annual Returns in FORM GSTR-9 or FORM GSTR-9A, strengthening discipline in filing annual returns.

  7. Amendments will be made to require OIDAR service providers to provide details of supplies made to registered persons in India in their return in FORM GSTR-5A, ensuring the payment of tax on a reverse charge basis.

  8. The value of supply of goods from Duty Free Shops at arrival terminals in international airports will be included in the value of exempt supplies for the purpose of reversal of input tax credit.

  9. Compounding amounts will be prescribed for various offenses under section 132 of the CGST Act, 2017.

  10. Rules will be inserted to allow consent-based sharing of information of registered persons between the common portal and other systems. Account Aggregators will be notified as the systems for sharing information.

  11. Amendments will be made to clarify the place of supply in respect of the supply of goods to unregistered persons.

  12. A State-level coordination committee comprising GST officers from State and Central administrations will be formed for knowledge sharing and coordinated efforts towards administrative and preventive measures.

  13. The second interim report of the Group of Ministers (GoM) on IT System Reforms, which includes measures to combat GST frauds and strengthen risk management, will be implemented.

These recommendations and measures aim to bring about changes in GST tax rates, facilitate trade, and streamline compliance processes, ultimately benefiting taxpayers and promoting the smooth functioning of the GST system.


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