India’s Goods and Services Tax (GST) Council has announced that the 28% tax rate on online gambling and casinos will be maintained after a thorough six-month review. The decision, which was made during a meeting held on Thursday, has sparked mixed reactions among industry stakeholders and experts.
The 28% tax rate on gambling and casinos was first introduced in July 2017 as part of the GST reform in India. Since then, the casino and online gambling industry has been lobbying for a reduction in the tax rate, arguing that it is too high and hampers the growth of the sector. However, the GST Council has stood firm on its decision to maintain the tax rate, citing the need for revenue generation and regulation of the industry.
Speaking after the meeting, Finance Minister Nirmala Sitharaman defended the decision, stating that the 28% tax rate is necessary to discourage excessive gambling and protect vulnerable individuals from the negative consequences of gambling addiction. She also emphasized the importance of regulating the gambling industry to prevent money laundering and other criminal activities.
Despite the council’s decision, industry stakeholders have expressed disappointment and frustration. A spokesperson for the Online Rummy Federation, a trade association representing online rummy operators in India, stated that the high tax rate puts unnecessary financial burden on operators and hinders their ability to compete in the market. The spokesperson called for a reconsideration of the tax rate and urged the government to provide relief to the industry.
On the other hand, some experts have applauded the GST Council’s decision to maintain the 28% tax rate on online gambling and casinos. They argue that the tax rate is in line with international standards and will help deter illegal gambling activities. They also believe that the revenue generated from the tax can be used for social welfare programs and infrastructure development.
In light of the council’s decision, it remains to be seen how the online gambling and casino industry in India will adapt to the high tax rate. Some operators may be forced to increase their prices or scale back their operations, while others may look for innovative ways to attract customers and improve their profit margins. With the industry facing a challenging regulatory environment, stakeholders will need to work together to find solutions that benefit both the government and the operators.