Held on 2 August 2023 at New Delhi (Vigyan Bhawan), the 51st Meeting delivered the landmark 28% online gaming tax decision, approved GSTAT constitution, and clarified multiple industry-specific issues including SUVs, cinema food, and co-operative societies.
Tax levied on full face value of bets/entry fees, not just platform commission (Gross Gaming Revenue). Applies from 1 October 2023
Industry impactGST on full value of tokens/chips purchased at point of entry. No GST on individual bets within casino
Casino sectorAligned with online gaming — 28% on total amount paid by bettor, not just the margin of bookmaker
Racing industryCouncil agreed to review the online gaming taxation framework after 6 months of implementation (April 2024)
Future revisionGST rate reduced from 18% to 5% — raw materials for snack manufacturing
Food processingClassified under 2309 — 5% GST (animal feed ingredient)
AquacultureReduced from 12% to 5% — benefits textile/handicraft sector
TextilesExempted from GST — used as raw material in cement manufacturing
Cement/steel sectorGST Appellate Tribunal to be set up with Principal Bench in New Delhi and State/Area Benches across India
Dispute resolutionEach bench: 1 Judicial Member + 1 Technical Member (Centre) + 1 Technical Member (State). Principal Bench headed by President
Structure defined10% of disputed tax for first appeal (capped at ₹25 crore). Additional 20% for appeal to GSTAT (total 30%)
Litigation costsStates to recommend members within 60 days. Target: operational by early 2024 (Principal Bench first)
ImplementationClarified that SUVs attract compensation cess — vehicle must meet ALL criteria: length >4m, engine >1500cc, ground clearance >170mm (unladen)
Auto sectorAir travel by MLAs/MPs using government quota — constitutionally mandated, not a supply — no GST
Constitutional clarityWhen supplied as part of a service (bundled with movie ticket) — 18% GST. When supplied independently — 5%
Entertainment sectorServices by RWA/co-op society to members — exempt if monthly contribution ≤₹7,500 per member
Residential sector| Item/Service | Old Rate | New Rate | Effective |
|---|---|---|---|
| Online gaming (full bet value) | 18% on GGR | 28% on full value | 1 Oct 2023 |
| Casino (token purchase) | 28% on GGR | 28% on purchase value | 1 Oct 2023 |
| Horse racing | 28% on commission | 28% on full bet | 1 Oct 2023 |
| Uncooked snack pellets | 18% | 5% | Notified later |
| Imitation zari thread | 12% | 5% | Notified later |
| LD slag (steel) | 18% | Exempt | Notified later |
| Fish soluble paste | 18% | 5% | Notified later |
The most impactful decision was confirming 28% GST on the full face value of bets in online gaming, casinos, and horse racing, effective from 1 October 2023. Previously, gaming platforms argued for 18% on Gross Gaming Revenue (platform commission only). The Council rejected this and mandated 28% on the full amount wagered/deposited. This increased effective taxation by 5-10x for gaming companies and led to significant industry restructuring.
GSTAT (GST Appellate Tribunal) is the second appellate authority under GST — similar to ITAT for income tax. The 51st Council approved its constitution with a Principal Bench in New Delhi and State/Area Benches. Each bench has 3 members: 1 Judicial + 1 Technical (Centre) + 1 Technical (State). Before GSTAT, taxpayers had to directly approach High Courts after first appeal, which was time-consuming and expensive. Pre-deposit is 10% for first appeal + 20% for GSTAT appeal.
When a player deposits ₹1,000 into an online gaming platform: GST = 28% × ₹1,000 = ₹280 is deducted upfront. Only ₹720 is available for play. This applies at the point of deposit/entry, not on each individual game/bet. For casinos, it's charged on token/chip purchase. For horse racing, on the bet placed. Winnings from games are not taxed again under GST (but income tax applies separately on winnings).
The Council clarified: (1) If food/beverages are supplied independently at a cinema hall counter (separate bill, customer can choose not to buy) — it's treated as restaurant service at 5% GST without ITC. (2) If food is bundled with movie tickets as a composite supply where the movie ticket is the principal supply — the entire bundle attracts 18% GST. This resolved a long-standing dispute in the entertainment industry about classification.
The Council clarified that for a vehicle to attract the 22% compensation cess (on top of 28% GST, total 50%), it must meet ALL three criteria simultaneously: (1) Length exceeding 4,000mm, (2) Engine capacity exceeding 1,500cc, AND (3) Ground clearance of 170mm or more in unladen condition. If any one criterion is not met, the higher cess doesn't apply. This resolved disputes where compact SUVs were being incorrectly charged the higher cess.
Our GST experts can help you restructure compliance for the new 28% online gaming framework.
Schedule a Consultation