In a significant development, the Uttar Pradesh assembly has given its official nod to a bill proposing a 28% Goods and Services Tax (GST) on online gaming, casinos, lotteries, and horse racing events within the state. The bill, introduced by State Parliamentary and Finance Minister Suresh Khanna, marks a shift from taxing Gross Gaming Revenue (GGR) to imposing a 28% tax at the entry level, a move aimed at minimizing manipulation by game promoters and service providers.
During his address in the legislative assembly, Minister Khanna expressed the view that online gaming, lotteries, casinos, and horse racing should be categorized as games of chance rather than skill. He highlighted the susceptibility of the previously imposed tax on GGR to manipulation by promoters or service providers. To enhance accountability, the new legislation mandates that both game promoters and their agents register with the government.
The decision to enforce the higher tax, effective from October 1, originated from a directive by the Centre. In the absence of a legislative session, the UP government promulgated an ordinance to implement the tax. This issue had previously been deliberated in the GST Council over two years ago, leading to a formal decision by a Group of Ministers (GoM) to implement the higher tax. Minister Khanna emphasized that Uttar Pradesh took the initiative in imposing the higher tax.
Uttar Pradesh is now the 22nd state to adopt this measure, following in the footsteps of Maharashtra, Karnataka, Madhya Pradesh, and others. States such as J&K, Jharkhand, Rajasthan, Telangana, Kerala, Chhattisgarh, and Punjab have already implemented the measure through ordinances. Amidst these developments, Samar Pal Singh, an SP MLA from Naugaon Sadat in Amroha, has advocated for a complete ban on the online gaming industry in the state, citing potential negative impacts on future generations.
