goods and service tax
Published on 24 June 2025
Govt: Online Gaming with Stakes Equals Gambling, 28% GST
Online Gaming vs GST: Government Calls It Betting, Not Just Skill
On Monday, the Centre made its stand crystal clear in front of the Supreme Court — online gaming platforms aren’t just offering harmless games of skill, they’re running digital gambling setups. And that, said the tax department, deserves a full 28% GST rate.
The Directorate General of GST Intelligence (DGGI) laid it all out before a bench led by Justice JB Pardiwala. Representing the department, Additional Solicitor General (ASG) N Venkataraman didn’t hold back. He said, "We’re not taxing the idea of games, whether online or offline. What we’re going after are the speculative outcomes — where people bet money hoping to win more. That’s classic gambling."
The distinction between skill and chance? The ASG said it doesn’t matter here. "Even if you claim rummy is a game of skill, once stakes come into play — money gets wagered — it turns into gambling. And that’s taxable at 28%, not 18%."
He also questioned how gaming companies could argue otherwise, saying, "If placing bets is gambling and clearly taxable, how can these companies claim they’re offering something different when they’re doing the same — just online?"
Here’s the backstory: Many online gaming companies have been paying 18% GST, treating their platforms as service providers. But the government says that doesn’t cut it. According to the Central GST Act, anything involving speculative outcomes — basically, where players stake real money for a chance-based result — counts as gambling, and is taxed at 28%.
With this strong stance, the government is making it clear that it’s not interested in what you call the game — it’s how it works that matters. And if stakes and winnings are involved, then it falls squarely into the betting and gambling category, bringing in the higher GST slab.
The matter is now before the Supreme Court — and whichever way the judgment swings, it’s bound to have a massive impact on India’s booming online gaming industry.