There was disappointment felt from online operators in India as the 54th Goods and Services Tax (GST) Council ended with no changes made to the 28% GST levy.
Increasing the levy last October, which was previously at 18%, has caused significant disruption to the Indian gaming sector and led to widespread criticism from the sector.
The rise was officially implemented in January by regional state governor Arif Mohammed Khan and has been felt across the gambling space including casino.
It has also led to calls from the industry for it to be transitioned into a tax on Gross Gaming Revenue rather than deposits, in a bid to secure stability for the industry. However, these have been dismissed by the governance in the region.
The changes have forced some major operators like Superbet, the parent company of Betway, to hastily exit the market.
Superbet stated upon departing the market: “The newly effective tax rules make the Indian market no longer commercially viable for Super Group.”
Neal Menashe, CEO of Super Group, added at the time: “We are continuously evaluating evolving regulatory landscapes across the many markets we serve.
“Informed by years of operating our geographically diverse business, we remain confident about the long-term growth opportunities in front of us.”
In order to compare the current tax regime with the economic landscape in previous years, Ernst & Young (EY) and the US-India Strategic Partnership Forum (USISPF) published a report showcasing that India’s gambling sector attracted over $2.6bn in investments in 2019.
The analysis then adds that there has been no capital raised from domestic or global investors since the 28% GST tax was signed into force almost a year ago. At the latest GST Council meeting however, Nirmala Sitharaman, Minister of Corporate Affairs, justified the levy’s adoption with the apparent increase in revenue from online gambling, which she said jumped by 412% to Rs 6,909 Crore (£628m) in the six months after the new tax threshold was introduced (November-April).
