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Taxability of Online Gaming under GST Law


Online gaming can be referred to any type of games that someone can play through internet or over a computer network.

Online gaming operators provide platform wherein multiple players of different locations across the world can come together to play online.

India has produced 3 gaming unicorns i.e., Game 24X7, Dream11 and Mobile Premier League where revenue from online gaming grew to $1.6 billion i.e., by 39% in 2022.


Business Model:

The business model of these online gaming is based on three terminologies- The contest fee, platform fee and prize money.

Contest fee i.e., Gross Gaming Value (GGV) is the money that every player playing online have to put into the platform at the time of entering the contest.

Out of the total money collected, they retain 10-20% money with themselves in the form of platform fee i.e., Gross Gaming Revenue (GGR)/ administration fee/ entry fee/ registration fee for providing services.

The remaining amount (i.e., contest fee – platform fee) shall be distributed as prize money to the winner of the contest.



In order to understand the taxability on online gaming from GST perspective, first we need to understand difference between games of skill and games of chance since the current GST regime differentiates online games between skill versus chance based on industry practices.


S. no. Parameters Game of Skill Game of Chance
1. Plays against Another similar player/user The House like casino.
2. Requires Practice, experience, tactics, skill Mostly chance/ luck-based
3. Result Wholly certain Wholly uncertain/ doubtful
4. Example Poker, Rummy, Fantasy Sports Rolling of a dice, lottery

Current Taxability:
Currently, the following GST rates are applicable to online gaming based on industry’s practice:

For a game of skill, such as esports, puzzles, and some card games, an 18% GST is chargeable under HSN 998439 only on the platform’s fee or GGR.

For a game of chance, including gambling at casinos, 28% GST is chargeable under HSN 999692 on the contest fees or GGV.

Proposed Taxability:

  • The latest interim GoM (Group of ministers) proposed to do away with the distinction of classifying online games into skill or chance, as it complicates the tax calculations. Instead, it recommends that a flat GST rate of 28% on all kind of online games, including skill games. Further, this rate will be chargeable on a ‘gross value’ basis, i.e., on the total contest fee and not simply on the platform fee paid.
  • The GST Council in its 51st council meeting held on 2nd August, 2023 has recommended to implement 28% GST on online gaming, casinos and horse racing from October 1st this year. However, in a reprieve to the online gaming sector, the government has clarified that the tax will be levied on the contest entry amount, excluding the winnings.
  • The GST Council also recommended that valuation of supply of online gaming and actionable claims in casinos may be done based on the amount paid or payable to or deposited with the supplier, by or on behalf of the player (excluding the amount entered into games or bets out of winnings of previous games or bets) and not on the total value of each bet placed.
  • For offshore gaming companies, the Council also recommended to insert a specific provision in IGST Act, 2017 to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India for the said supplier through a simplified registration scheme and also for blocking of access by the public to any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier in case of failure to comply with provisions of registration and payment of tax.


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The information contained herein is in summary form and is prepared based on the provisions of GST and allied laws and related Rules, Circulars, Notifications therein. For details, please refer the relevant provisions. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of this information. Reader should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.