GST on Online Gaming Services

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Gaming is no Exception in virtual reality that has become an important part of our life. The epidemic has also led to a transformation in children’s playgrounds. In India, both the income and consumption of the online gaming sector have grown exponentially. Online gaming is forecast to increase at a combined pace of 22 percent annually and become an industry of $2 billion by 2023. In this article, we will understand about GST on Online Gaming Services.

GST on Online Gaming

Section 7 of the CGST Act, 2017 defines supply; hence, if any transaction is not covered in this definition, it falls outside the ambit of GST. Section 7 inter-alia states that activities or transactions covered under Schedule III to the CGST Act, 2017 would neither be treated as a supply of goods nor as to the supply of services. Item no. 6 in the said schedule specifies ‘actionable claims other than lottery, betting, and gambling.

Therefore, any actionable claim apart from lottery betting or gambling would not get covered under the ambit of GST law.

However, the term ‘actionable claims’ is not defined under the GST Act; it simply refers to the definition of actionable claims from the Transfer of Property Act, 1882.

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As we have seen, among the three main revenues that an online gaming portal can earn, it is clear that both the advertising revenue as well as the rake fees should be subject to GST. Because there is clearly a supply of services, which is platform facilitation as well as marketing revenue, this is why. The taxability of the pool in the case of monetary games must be assessed.

Thus, GST liability is on the supplier. Online games are conducted by the platform and therefore the supplier is liable for tax.

In Conclusion, The game platform must follow all requirements for a supplier, such as GST Registration and subsequent GST Return Filing.

GST Audit To Be Discontinued With The Effect Of 1st August 2021

If you want any other guidance relating to the GST Registration, and GST Return Filing, please feel free to talk to our business advisors at 8881-069-069.

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