Understanding the Impact of CGST Notification No. 45/2023 on Online Gaming and Casinos


Hello and welcome to Pre-Taxes Solutions, where we share the latest updates and insights on GST laws and regulations in India. In this post, we will explain the new rules for valuation of supply of online gaming and casino services, which were notified by the Central Board of Indirect Taxes and Customs (CBIC) on 6th September 2023.

As you may know, online gaming and casino are taxable under GST as supply of services. However, there was no clear guidance on how to determine the value of such services, especially when they involve actionable claims or virtual assets. This created confusion and ambiguity among the taxpayers and tax authorities.

To address this issue, the CBIC has issued Notification No. 45/2023-CGST, which inserts two new rules in the CGST Rules, 2017: Rule 31B and Rule 31C. These rules prescribe the method of valuation of supply of online gaming and casino services, respectively.

Rule 31B states that the value of supply of online gaming, including supply of actionable claims involved in online money gaming, shall be the total amount paid or payable to or deposited with the supplier by way of money or money’s worth, including virtual digital assets, by or on behalf of the player. This means that the GST will be levied on the entire amount that the player spends or deposits with the online gaming platform, irrespective of whether he wins or loses any game or event. However, any amount returned or refunded by the supplier to the player for any reasons whatsoever, such as player not using the amount paid or deposited with the supplier for participating in any event, shall not be deductible from the value of supply of online money gaming.

Rule 31C states that the value of supply of actionable claims in casino shall be the total amount paid or payable by or on behalf of the player for purchase of tokens, chips, coins or tickets, by whatever name called, for use in casino; or participating in any event, including game, scheme, competition or any other activity or process, in the casino, in cases where tokens, chips, coins or tickets are not required. This means that the GST will be levied on the entire amount that the player spends or pays for entering or playing in the casino, irrespective of whether he wins or loses any game or event. However, any amount returned or refunded by the casino to the player on return of tokens, coins, chips, or tickets, as the case may be, or otherwise, shall not be deductible from the value of supply of actionable claims in casino.

The notification also clarifies that any amount received by the player by winning any event, including game, scheme, competition or any other activity or process, which is used for playing by the said player in a further event without withdrawing, shall not be considered as the amount paid to or deposited with the supplier by or on behalf of the said player. This means that if a player wins some amount in a game and uses it to play another game without cashing out, then such amount will not be subject to GST.

The notification is effective from 1st October 2023 and applies to all online gaming and casino services provided in India. The notification aims to bring clarity and uniformity in the valuation of such services and ensure compliance with GST laws.

If you want to read the full text of the notification or download it for your reference, you can click here Download

I hope you found this post informative and useful. If you have any questions or comments, please feel free to share them below. Thank you for reading and stay tuned for more updates on GST.

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