Uttar Pradesh (UP) state assembly on Wednesday, November 29 passed the bill imposing 28% GST on full face value for online gaming (real money), casinos and horse racing as dictated by the Finance Ministry.
State finance minister Suresh Khanna chaired the bill. During the discussion, he said that online gaming, lottery, casinos, and horse racing should be identified as games of chance. The aforesaid games fall under skill-based category as per a Supreme Court ruling.
MLA Samar Pal opined that online gaming industry should be banned completely. However, FM Khanna said that pacy growth and rising popularity of online gaming makes it impossible.
“The state government has thus decided to check it and discourage it through the best possible steps. Imposing higher tax is one such step,” Khanna said as per The Times of India.
Preceding GST Council’s decision, the government taxing the said activities at 18% GST on gross gaming revenue. However, a Group of Ministers (GoM) analysed the matter to propose an increased taxation on the activities.
States to soon pass bill affecting increased GST on online gaming
The new GST rate initially took effect starting October 1, however, several states are yet to fully implement the same. Many states decided to quickly promulgate an ordinance as the assembly sessions were not in effect. Slowly, but surely, states are now passing the bill one by one.
With this, UP is now one of the 21 states that have implemented the new GST regime. Few of the other states remaining include J&K, Jharkhand, Rajasthan, Telangana, Kerala, Chhattisgarh and Punjab. These states have promulgated the ordinance for the same, but are yet to the pass the bill.
There is, however, a chance that the current GST rate may be tweaked in the future a little. This is because the GST council has decided to observe the current GST rate for six months from implementation.