The decision relates to a six-month review of its tax hike, which came into force in October 2023.

India’s minister of finance and corporate affairs Nirmala Sitharaman told the media today that online gambling revenue had shot up 412% between November and April to ₹6909 Crore ($823m/£628m), in the six months since the gambling tax was introduced.

Land-based casino revenue was also up 30% in the six months to ₹1214 Crore ($25.5m/£19.5m).

When questioned on whether the increase in revenues suggested the sector had accepted the tax hike, minister Sitharaman said: “The council heard the facts and that’s where it was left.

“It was more a presentation of the current situation. That was a promise that was given to review [the regime] after six months. It’s been more than six months now and we have given a picture [of the sector].”

Stakeholders had warned the sector could suffer with a high gambling tax rate and the review was postponed during the GST’s June session, much to the sector’s annoyance.

“The online gaming industry was eagerly looking forward to the GST council meeting in the hope that their concerns will be addressed by council,” Rajat Bose, partner at Shardul Amarchand Mangaldas & Co Advocates & Solicitors said at the time.

Sector stifled by India gambling tax increase

“The heavy taxation is likely to be passed on to the players,” economist and former Indian government official Dr Aruna Sharma previously told iGB.

A report by EY and the US-India Strategic Partnership Forum suggested the tax hike has negatively impacted gambling businesses in the country.

The report found that the Indian gaming sector has attracted $2.6bn of foreign direct investment since 2019. However, no capital has been raised since the new tax regime was introduced.

The GST consists of Sitharaman and representatives from all states and union territories across India. It has the power to decide on tax rates, exemptions and administrative procedures.

The Indian government published a new set of rules to regulate online gambling in January 2023, which included the creation of independent “self-regulatory bodies”, enabling online gaming businesses, to create rules for the sector.

Original article: https://igamingbusiness.com/legal-compliance/regulation/india-to-keep-gambling-tax/

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