According to former Central Board of Indirect Taxes and Customs (CBIC) chairman Najib Shah, the gaming industry needs to adapt in order to handle the 28 percent Goods and Services Tax (GST) on the full value of its services.

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The GST council at its 50th meeting in Delhi, agreed to impose 28 percent tax on the full value of online gaming, horse racing and casinos. The gaming industry has called it a "killer blow".

In an interview with CNBC-TV18, Shah expressed that the implementation of a 28 percent GST on gaming was always anticipated. He emphasised the substantial investment potential within the gaming industry.

"There is no emotion involved here. It was a levy which was likely to happen, it has been in the offing. So, the industry should shape up to it and ensure that they are able to handle it. This is an industry which has huge investments and potential and rarely has a tax killed an industry," Shah said.

The application of the 28 percent tax will be enforced once amendments to the GST laws are made.

Pratik Jain, a Partner at PwC India, hopes that the amendment will be prospective in nature. He believes that if the amendment is implemented retrospectively, some companies will struggle to sustain themselves as the total amount, including penalties, may exceed their revenue.

Additionally, the council clarified that all Multi-Utility Vehicles (MUV), such as Sports Utility Vehicles (SUVs) or Crossover Utility Vehicles (CUV), will be subject to a 22 percent compensation cess on top of the 28 percent GST rate. Moreover, the GST rate for food and beverages served in cinema halls has been fixed at five percent. This decision was made in response to concerns raised by the Multiplex Association of India regarding the confusion surrounding the taxation of food and drinks in cinema halls.

Watch video for entire discussion.

(Edited by : Sangam Singh)

First Published:Jul 12, 2023 8:44 PM IST