Sanjay Agarwal, the chairman of the Central Board of Indirect Taxes and Customs (CBIC), has said that India is poised to begin taxing online gaming at a 28 percent Goods and Services Tax (GST) rate from October 1.
The Finance Ministry had earlier notified an amendment into the GST rules and had informed that the 28 percent GST will be applicable on the entry-level value, irrespective of skill or chance.
Following the recent passage of modifications to the GST laws in the Lok Sabha, this action was taken with the support of all the states, according to a report by Moneycontrol.
"We are ready to implement a 28 per cent GST rate on online gaming from October 1 with the consent of all the states. The law for GST rate on online gaming will have to be passed by the assembly of states. Show cause notices to some online gaming companies are legal process." CBIC Chairman Sanjay Agarwal said.
However, Goa, Sikkim, and Delhi wanted a review into the tax regime of 28 percent for casinos and online gaming.
"States need to pass in their assemblies or issue ordinance by September 30 to implement 28 percent GST on online gaming from October 1," he added.
He also said that a review will be done into the 28 percent tax regime after six months.
Regarding the show-cause notices that online gaming businesses are receiving, he stated that they are being issued in accordance with the law and are a reflection of the department's position.
"The department is taking a uniform stand in interpretation of law and accordingly show cause notices are being issued," he said.