In a significant legislative move, the government of Bihar has introduced an amendment bill in the state assembly to supplant an existing ordinance, thereby facilitating the imposition of a 28 percent Goods and Services Tax (GST) on the burgeoning realm of online gaming within the state.
The imposition of an additional tax rate of 28 percent on online gaming, racecourses, and casinos has been operational since October 1, following a central government notification issued in September.
During the inauguration of the winter session of the state legislature, State Finance Minister Vijay Kumar Choudhary presented the Bihar Goods and Services Tax (Second Amendment) Bill-2023 on Monday, underlining the government’s commitment to these fiscal modifications.
In a notable development, the Union Ministry of Finance, in concurrence with the Goods and Services Tax (GST) Council’s decision in August, issued official notifications endorsing the imposition of a uniform 28 percent GST on online gaming, casinos, horse racing, betting, gambling, and lottery activities in September. The subsequent enforcement of this new tax regime from October 1 necessitated the replacement of the prior promulgated ordinance by the presented amendment bill, as elucidated by Minister Choudhary in an exclusive interview with PTI.
The state government’s anticipation of augmented fiscal revenues is inherently tied to this revised, higher tax rate, a prospect that Minister Choudhary underscored in his address. The imposition of a 28 percent GST on these economic sectors represents a paradigm shift, considering that the online gaming industry previously bore an 18 percent tax on its Gross Gaming Revenue (GGR).
It is imperative to grasp that the GGR corresponds to the disparity between the total wagers made by players and the aggregate payouts dispensed as winnings.
Under this updated tax framework, a substantial 28 percent GST will be levied on the monetary amount deposited by a player engaging in a game. To illustrate, if a player initiates a deposit of Rs 2,000 for a gaming venture, the ensuing tax obligation amounts to Rs 560, marking a noteworthy fiscal alteration.
The implications of this legislative shift encompass far-reaching fiscal considerations, along with the potential to redefine the tax landscape for various sectors engaging with online gaming and related activities.
