Amendments to 2 GST bills, including a 28% tax on online gaming, approved by Lok Sabha.

During the monsoon session of Parliament, the Lok Sabha has successfully passed amendments to two crucial Goods and Services Tax (GST) bills, which are aimed at instituting a 28 percent tax on activities such as online gaming, casinos, and horse race clubs. This legislative move was led by Finance Minister Nirmala Sitharaman, who introduced the proposed changes to the Central and Integrated GST laws.

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The main thrust of these amendments is the proposal to implement a 28 percent tax on the complete nominal value of wagers involved in online gaming, casinos, and horse race clubs. These changes were introduced through two bills, namely the Central Goods and Services Tax (Amendment) Bill, 2023, and The Integrated Goods and Services Tax (Amendment) Bill, 2023.

Despite the passage of these bills, they were not without controversy, as they faced protests during the process. However, they were ultimately approved by the Lok Sabha.

The amendments bring about several significant changes to the existing taxation framework. Within the Schedule III of the CGST Act, 2017, new clauses are being introduced to provide explicit guidelines for the taxation of transactions taking place within casinos, horse racing, and online gaming. Additionally, an amendment within the IGST Act aims to establish GST obligations for offshore entities that are engaged in online money gaming. This entails the requirement for these offshore entities to register for GST within India.

Furthermore, the revisions also include provisions to curb access to offshore online gaming platforms in situations where non-compliance with registration and tax payment requirements is observed.

These proposed amendments to the Central GST (CGST) and Integrated GST (IGST) laws had gained approval from the GST Council in the preceding week. Importantly, the council gave its endorsement for the imposition of a 28 percent GST on the overall nominal value of entry-level bets made in the realms of online gaming, casinos, and horse racing.

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