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India’s online gaming landscape changed forever on 22 August 2025, when the President of India gave assent to the Promotion and Regulation of Online Gaming Act, 2025 (Act No. 32 of 2025)
The Indian online gaming industry is at a crossroads as tax authorities gear up to issue final tax demands by February 5, 2025, based on the pending show-cause notices (SCNs). As the deadline nears, many gaming companies have already been served tax notices by authorities. Although gaming firms are waiting for the Supreme Court’s deliberation on the matter, given the timeline, a verdict before February 2025 appears unlikely, according to a report by The Economic Times.
The Directorate General of GST Intelligence (DGGI), the central investigation and anti-evasion arm under the finance ministry, has detected the highest-ever goods and services tax (GST) evasion by the online money gaming industry, amounting to Rs 81,875 crore in FY24 across 78 cases.
The much-anticipated GST Council meeting concluded on Saturday with a slew of clarifications for various industries. However, hopes for a review of the 28% Goods and Services Tax (GST) rate on online gaming and casinos were dashed, as Finance Minister Nirmala Sitharaman confirmed that the issue was not discussed.
The taxability of online gaming services under goods and services tax (GST) has always been tricky, hinged on the distinction of whether they are classified as ‘gambling’ or ‘skill-based’ activities. While gambling activities such as betting and casino games attracted a 28 percent GST rate, skill-based games were taxed at a lower 18 percent rate.
The Central Board of Direct Taxes (CBDT) published PPT in March, 2024 on ‘Taxation on Online Gaming’.
The online gaming industry plans to approach the new government after the general elections to request a reduction in Goods and Services Tax (GST). They propose that the tax be computed on the Gross Gaming Revenue (GGR) instead of the full face value. This proposal is based on the belief that the current high tax rate is unsustainable for startups in the sector.
Online Gaming & Casinos emerged at the top in terms of detection of GST evasion during Fiscal Year 2023-24, annual data compiled by the Directorate General of GST Intelligence (DGGI) showed. This sector alone accounted for more than 40 per cent of the amount involved in GST evasion detection
Online Gaming & Casinos emerged at the top in terms of detection of GST evasion during Fiscal Year 2023-24, annual data compiled by the DGGI showed. This sector alone accounted for more than 40 per cent of the amount involved in GST evasion detection.
The union government has filed a transfer petition before the Supreme Court seeking transfer of all pending cases before the High Courts challenging GST notices issued to real money gaming companies. In a hearing today before the Sikkim High Court in relation to a petition by Delta Corp, the Deputy Solicitor General informed the court about the transfer petition.