In the upcoming fiscal year, the Indian government aims to collect up to 140 billion rupees ($1.7 billion) in goods and services tax (GST) from online gambling companies, according to Revenue Secretary Sanjay Malhotra.
This move follows the imposition of a 28 per cent tax on funds collected by online gaming companies from their customers for each bet, causing concern within the $1.5 billion industry, which is supported by global investors as per a report by Hindustan Times.
In the current fiscal year ending on 31 March, the government anticipates collecting about 75 billion rupees from the online gambling tax, a significant increase from the 16 billion rupees collected in the previous year.
The tax generated 35 billion rupees in the October-December quarter, indicating a notable impact.
Malhotra mentioned that the industry has stabilised, but it is too early to draw definitive conclusions.
A review of the framework for taxing online gambling companies is scheduled for completion by April, although this does not necessarily imply changes to the existing tax rates.
Despite the challenges faced by the online gambling sector due to the tax imposition, the government's overall GST collections have remained robust, averaging 1.7 trillion rupees per month.
Malhotra expressed optimism, stating, "We are expecting an average monthly collection of 1.80 trillion to 1.85 trillion rupees from the next fiscal year."
The Union Finance Ministry had officially declared that under the amended provisions of the GST law introducing the taxation of e-gaming, casinos, and horse racing will be implemented from 1 October.
According to the amended Central GST Act, these activities were categorised as "actionable claims," similar to lottery, betting, and gambling, subjecting them to a 28 per cent GST on the full face value of bets.
Bhuvan Krishna is Staff Writer at Swarajya.
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