The bill to modify the Central Goods and Service Tax Act of 2017 and the Integrated Goods and Service Tax Act of 2017 to charge a 28% tax on the entire face value of bets placed in online gaming, casinos, and horse racing clubs was approved by the Lok Sabha on Friday.

Earlier in the day, amid opposition protests over the suspension of Congress leader Adhir Ranjan Chowdhury from the House, Union Finance Minister Nirmala Sitharaman introduced two bills in the lower house: the Central Goods and Services Tax (Amendment) Bill, 2023, and the Integrated Goods and Services Tax (Amendment) Bill, 2023.

The GST Council last week approved the changes to the Central GST (CGST) and Integrated GST (IGST) rules. The monsoon session of Parliament ends on Friday.

The changes concern the addition of a clause to Schedule III of the CGST Act, 2017, which clarifies how supplies for casinos, horse races, and online gambling are taxed.

On the other hand, the IGST Act was changed to include a clause imposing GST responsibility on online money gaming offered by foreign organisations. Such organisations will have to register for GST in India.

In the event that the conditions for registration and tax payment are not followed, the changes will also include measures for restricting access to online gambling platforms with foreign locations.

The GST Council resolved on July 11 to include online gambling, horse racing, and casinos in the 28%.

Following input from many groups and stakeholders, the Council reached decisions on August 2 about, among other things, the methods of implementation, enabling provisions, and changes that must be made in the laws in order to include online gaming as a taxable action that is eligible for a deduction.

The online gaming business has opposed the change and has repeatedly urged the Centre and the finance ministry to reduce the hefty tax levied on the industry. Local businesses have also complained in writing to the finance ministry about the negative effects of the change on the industry.

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