India retains 28% gambling tax as revenues rise
Date: 2024-09-10 Author: Alex Crawford Categories: EVENTS
India’s Goods and Services Tax (GST) Council has announced that the 28% tax rate on turnover from online gambling, casinos and horse racing betting will remain unchanged. The rate was introduced in October 2023 and the review has now been completed.
India’s Finance and Corporate Affairs Minister Nirmala Sitharaman said online gambling revenues increased by 412% in the six months from November to April, reaching Rs 6,909 crore (around $823 million). Land-based casino revenues also grew by 30% in the same period, reaching Rs 1,214 crore ($25.5 million).
When asked if the increase in revenues was an indication that the industry had accepted the tax hike, Minister Sitharaman said, “The Council has reviewed the current situation. It had promised to review it in six months and now we have provided a complete picture.”
Earlier, there were concerns among market players that the high tax rate could adversely affect the industry. However, despite these concerns, the Council deferred the review during its June session, leaving the industry disappointed.
“The online gaming industry was eagerly waiting for the GST Council meeting, hoping that their concerns would be addressed,” said Rajat Bose, partner at law firm Shardul Amarchand Mangaldas & Co.
Impact of the tax on the gambling industry
Economist and former Indian civil servant Dr. Aruna Sharma had earlier predicted that the higher tax rate could fall on the shoulders of gamblers. According to a report by EY and the US-India Strategic Partnership Forum, the new tax regime has had a negative impact on businesses. The report noted that the industry has attracted about $2.6 billion in foreign investment since 2019, but no new capital has come in since the tax was introduced.
The GST Council, which includes Sitharaman and representatives from all states and union territories in India, has the power to determine tax rates, grant exemptions, and set administrative procedures. In January 2023, the Indian government released new rules to regulate online gaming, including the creation of independent self-regulatory organizations that allow companies in the industry to develop regulations for their own operations.
