Uttar Pradesh Passes Bill Implementing 28% GST for Online Gaming, Casinos and Horse Racing

Table of Contents

Uttar Pradesh Passes Bill Implementing 28% GST for Online Gaming –

On Wednesday, November 29, the Uttar Pradesh (UP) state legislature enacted a law imposing a 28% GST on full face value for internet gambling (real money), casinos, and horse racing, as mandated by the Finance Ministry. Suresh Khanna, the state finance minister, presided over the bill. During the debate, he stated that internet gambling, lottery, casinos, and horse racing should all be classified as games of chance. According to a Supreme Court verdict, the aforementioned games fit within the skill-based category. MLA Samar Pal believes that the internet gambling sector should be fully prohibited. However, FM Khanna stated that it is difficult due to the rapid rise and expanding popularity of online gaming.

States Government will soon enact legislation imposing a higher GST on internet gambling says reports –

The new GST rate went into effect on October 1, but numerous states have failed to properly implement it. Because the assembly sessions were not in session, many states chose to rapidly pass an ordinance. States are now approving the law one by one, slowly but steadily.

UP is now one of the 21 states to have adopted the new GST regime. Among the remaining states are J&K, Jharkhand, Rajasthan, Telangana, Kerala, Chhattisgarh, and Punjab. These states have passed the ordinance but have yet to enact the law.

However, there is a probability that the existing GST rate will be somewhat adjusted in the future. This is due to the GST council’s decision to maintain the current GST rate for six months after introduction.

The law implemented the Centre’s directive to begin levying the additional tax on October 1. Because the legislature was not in session, the UP administration issued an ordinance to that effect. The GST council discussed the subject more than two years ago. Following that, the issue was taken up by a Group of Ministers (GoM), who formally resolved to collect a higher tax. Khanna stated that the decision to raise taxes was made at the request of the UP government.

Doomsday? 28% GST On Online Games 'Extra Burden' On Users And Platforms, 'Not In Line With Global Standards' — Image Source – Outlook India

As a result, the Centre requested that the states implement the proposal by issuing an ordinance or passing a bill in their respective legislatures. As a result, UP has joined the club of 21 states that have approved it through their legislatures, including Maharashtra, Karnataka, and Madhya Pradesh. J&K, Jharkhand, Rajasthan, Telangana, Kerala, Chhattisgarh, and Punjab are among the states that have passed an ordinance.

Samar Pal Singh, the SP MLA from Naugaon Sadat in Amroha, requested that the internet gaming sector be fully outlawed in the state since it was pulling generation after generation into a hole.

Khanna, on the other hand, claimed that “it was not possible” to halt the rapid rise of the online gaming system, which has gained widespread appeal, particularly among the young population. According to him, an estimated 14 crore individuals in the country are involved in the online gaming sector. “As a result, the state government has decided to put a stop to it and discourage it in the best way possible.” “Increasing taxes is one such step,” he explained.

Implications for Uttar Pradesh-

Uttar Pradesh is one of the largest states in India, with a population of over 200 million and a GDP of over Rs 17 lakh crore. The state is also known for its rich cultural and historical heritage, as well as its diverse and vibrant entertainment and tourism sectors. Online gaming, casinos and horse racing are some of the popular forms of entertainment and gambling in Uttar Pradesh, especially among the youth and the urban population.

According to a report by KPMG and Google, Uttar Pradesh is one of the top five states in India in terms of online gaming users, with over 30 million users as of 2023. The state also has several casinos and horse racing venues, such as the Lucknow Race Course, the Agra Race Course, the Varanasi Casino, and the Kanpur Casino, which attract thousands of visitors and players every year.

The History and Context of the Amendment Bills –

The conclusion was reached after three years of extensive debate. The GST Council formed a Group of Ministers (GoM), which travelled to several locations and met with various industry leaders.
The topic of taxation of supplies in casinos, horse racing, and internet gambling was discussed during the GST Council’s 42nd meeting, which was place between October 5th and 12th, 2020, and a Group of Ministers (GoM) was formed to address it.
GoM was reestablished on February 10th, 2022, with Conrad Sangma, Honourable Chief Minister of Meghalaya, as Convener. Ministers from Maharashtra, West Bengal, Gujarat, Goa, Tamil Nadu, Uttar Pradesh, and Telangana served on the GoM.
GoM also met with officials from the casino, horse racing, and internet gambling industries. Following extensive consideration, the GoM submitted its second report to the GST Council, which was considered by the Council during its 50th meeting on July 11th, 2023.