Different GSTs For Game Of Chance & Game Of Skills? This Is What Govt Is Planning For Online Gaming Taxation!

Shreya Bose

Shreya Bose

Apr 29, 2023

The Finance Ministry is thinking about imposing differential taxes for online gaming, especially games of chance and games of skill.

Different GSTs For Game Of Chance & Game Of Skills? This Is What Govt Is Planning For Online Gaming Taxation!

Tax structure

Games where the winning is contingent on a specific outcome or is in the nature of betting or gambling would attract 28% GST.

On the other hand, games involving some amount of skill could be taxed at a lower 18%.

The matter is expected to be put forward to the GST Council in its next meeting likely either in May or June.


It is a convoluted matter since not all online games are games of chance and not in the nature of betting or gambling.

The Finance Ministry will be presenting its view before the council.

The focus will be to differentiate between what should be a game of skill and what can be called a game of chance.

Currently online gaming platforms pay 18 per cent GST on platform fees and not on the full value including prize money.

Special Group of Ministers

A Group of Ministers (GoM), under Meghalaya Chief Minister Conrad Sangma, had submitted a report on GST on online gaming to Finance Minister Nirmala Sitharaman.

The GoM was constituted last year to examine the issue of valuation of services provided by casinos, race courses, and online gaming and to examine if any changes were required in the legal provisions.

The GoM had agreed on a 28 per cent GST on these segments.

No consensus

However there was no consensus on whether the tax should be levied on only the fees charged by the portal or the entire consideration, including the bet amount, received from participants.

As a result GoM had decided to refer all suggestions to the GST Council for a final decision.

The online gaming industry had grown exponentially during the pandemic.

Growth in the industry

It is currently contributing more than Rs 2,200 crores of GST.

The online gaming sector would grow to Rs 29,000 crore by 2024-25 from Rs 13,600 crore in 2020-21.

Overall market worth

India’s gaming market was estimated to be worth $2.6 Bn in FY22. 

It is estimated to reach a size of $8.6 Bn by FY27. 

The number of gamers in India stood at 507 Mn in FY22, growing 12% from 450 Mn in FY21.


Shreya Bose
Shreya Bose
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