Centre notifies amendments in CGST and IGST rules for online gaming cos; 28% GST rule to come into force on Oct 1

The centre on Friday notified the amendments in Central Goods and Services Tax (CGST) and Integrated Goods and Services Tax (IGST) for the online gaming companies as passed by the Lok Sabha on August 11 and in line with the recommendations of the GST Council. The amendments will come into effect from October 1.

As per the notification, these may be called the Central Goods and Services Tax (Third Amendment) Rules, 2023.

The government highlights that as part of the amendments, all gaming companies based outside India and providing service via intermediary are required to register themselves and deduct tax at source.


"Every person who is liable to be registered under sub-section (1) of section 25 and every person seeking registration under sub-section (3) of section 25 (hereafter in this Chapter referred to as "the applicant"), except–

(i) a non-resident taxable person;
(ii) a person required to deduct tax at source under section 51;
(iii) a person required to collect tax at source under section 52;
(iv) a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 or a person supplying online money gaming from a place outside India to a person in India referred to in section 14A under the Integrated Goods and Services Tax Act, 2017 (13 of 2017)

shall, before applying for registration, declare his Permanent Account Number, State or Union territory... Provided that every person being an Input Service Distributor shall make a separate application for registration as such Input Service Distributor," the notification specifies.

The government document also directs that the online gaming companies have to keep a database of its users and are required to file GST returns.

The primary aim of these legislative changes is to introduce a 28 per cent GST for online gaming, casinos, and horse racing.

In order to quickly change the applicable Acts and impose taxes on the said areas, the GST Council had made this decision in its 51st meeting on August 2.

According to the government, these reforms will bring much-needed clarity to the taxation of supply in horse racing, casinos, and internet gambling.