With the decision on changing the tax slab on online gaming and other related categories being the talk of the town lately, it is crucial to know the legal aspects related to GST rulings.

In India, until recently, gaming platforms were required to pay GST as they qualify as ‘suppliers’ of services as per the GST Act. The Goods and Service Tax (GST) Council has proposed to raise the GST on online gaming to 28% which was earlier 18%. Casino games, horse racing, lotteries, pay-to-play, and other chance-based games being combined with online skill gaming has created a disturbance in the online skill gaming industry. Let’s understand in detail, some of the GST Jargons that play an important role in the ruling.

Contest Entry Amount:
It is the total amount of money a player submits before the start of an online game. This amount includes contribution to the prize pool, indirect tax and platform fee.

Platform Fee:
It is the fee charged by the platform for providing the services in the form of online games. It is a fixed fee ranging from 5 to 15 percent of the total contest entry amount, depending on the game format.

Gross Gaming Revenue:
It is the revenue the platforms generate after the prize pool is deducted. In other words, it is the aggregate of platform fees.

Prize Pool:
It is the total pool of reward created by adding the contest entry amounts that each player paid minus indirect tax and platform fee.

Deposit to Platform :
This is the amount of money a player deposits in their own wallet hosted on the online gaming platform. For example, a player may deposit INR 100 in their wallet and then may choose to use INR 10 only or any other amount as contest entry amount for playing games each time.

Net Deposit:
Net deposit is equal to deposits minus balance in wallet and withdrawals.

The decision to re – evaluate tax rates has not yet been made. The industry is eagerly awaiting a resolution as the GoM will meet again in the first week of August and has until August 10 to submit their final report.