Last Tuesday, the Parliament session decided to raise the maximum 28 per cent tax on the online gaming area, while it lowered the tax on food and beverages sold in multiplexes and tweaked the definition of utility vehicles for the levy.

The panel also exempted GST (Goods and Services Tax) on import of medicines used to treat rare diseases and food used in Food for Special Medical Purposes (FSMP), besides satellite launch services provided by private operators.

Section 3 of the GST Act will be amended to bring online gaming and horse racing as taxable actionable claims. The bill is likely to be introduced in the monsoon session of Parliament.

Giving details of the decisions taken at the 50th Council meeting, Union finance minister Nirmala Sitharaman said the decision to levy maximum tax on online gaming and casinos was not intended to kill the industry but considering the “moral question”, it cannot be taxed at par with essential commodities.

The tax on online gaming companies would be imposed without making any differentiation based on whether the games required skill or were based on chance.

Joy Bhattacharjya, director-general of the Federation of Indian Fantasy Sports, said the decision of the council was very unfortunate and terrible for the online gaming industry.

He said 28 percent GST is high and a killer blow for the online gaming industry and for consumers, “The consumers do not have an opportunity for the amount of money that they play with and they will get far less in return and for a game of skill as well. Start-ups in the online gaming industry will not be able to survive this tax.”

Roland Landers, CEO of All India Gaming Federation (AIGF), said, “The only side which will benefit from high taxation will be the illegal betting or gambling industry and the start-up industry in the online gaming industry will be completely wiped out.”