Online Gaming: 28% GST in India

Online money gaming in India attracts 28% GST on the full face value of the amount deposited by a player, under Rule 31B of the CGST Rules. The same 28% rate applies to casinos and horse racing. Both domestic and offshore platforms must register in India and issue tax invoices on every deposit. Winnings redeposited are not retaxed. Alongside GST, Section 194BA imposes 30% TDS on net winnings, making compliance a synchronised exercise across direct and indirect tax in FY 2026-27.

Mayank Wadhera

Published: 5 Sept 2023

Updated: 16 May 2026

4 min read

The 28% GST regime on online money gaming, casinos and horse racing is now firmly embedded in India's tax architecture. Introduced through the 50th and 51st GST Council meetings and made operational from 1 October 2023, the levy continues into FY 2026-27 with minor procedural refinements. For platforms, investors and players, the cost of clarity is finally lower than the cost of confusion.

What exactly is taxed at 28%

GST at 28% is levied on the full face value of the amount deposited by a player with an online gaming platform — not on the platform's net commission or platform fee. The same 28% applies to casinos on the face value of chips purchased, and to horse racing on the full bet value. The earlier debate over game of skill versus game of chance is settled for indirect tax purposes: any online money gaming attracts the levy, regardless of skill or chance.

Registration and place of supply

Every online gaming platform supplying services to Indian players must register under GST in India, including offshore platforms, through a simplified registration mechanism.
Place of supply is the location of the recipient — typically the player's address on record.
Offshore platforms not registering are liable to be blocked under Section 14A of the IGST Act read with the IT Rules.

Valuation rules platforms must follow

Rule 31B of the CGST Rules defines the value of supply for online money gaming as the total amount paid or payable to or deposited with the supplier by the player. Winnings retained or redeposited by the player are not taxed again — a critical clarification that prevents cascading. Rule 31C addresses casinos with similar logic. Platforms should configure their billing systems to apply 28% on deposit, generate a tax invoice, and report through GSTR-1 and GSTR-3B.

Input tax credit and player implications

The platform can claim ITC on inputs and input services used for providing the gaming service, subject to standard restrictions.
Players cannot claim ITC since the service is consumed personally.
TDS at 30% on net winnings under Section 194BA continues to apply alongside the 28% GST.
The combined tax incidence — 28% GST upfront and 30% TDS on net winnings — makes financial literacy among players essential.

Compliance calendar for operators

Register on the GST portal or via the simplified scheme for offshore suppliers.
Issue a tax invoice on every deposit with 28% IGST or CGST+SGST as applicable.
File GSTR-1 by the 11th and GSTR-3B by the 20th of the following month.
Maintain player-level deposit and winnings ledgers for audit.
Reconcile Section 194BA TDS with the income tax portal monthly.

Industry impact and structural responses

The shift to 28% GST on deposits has restructured the economics of online money gaming. Platforms have rationalised promotional schemes, redesigned wallet flows to avoid double-counting redeposits, and tightened KYC at deposit stage to prevent platform shopping. Several smaller operators have exited or consolidated, while larger platforms have invested in compliance technology to automate IRN generation, GSTR-1 filing, and Section 194BA TDS calculations at withdrawal. For investors, the regulatory clarity has improved underwriting of growth-stage gaming companies, even as the cost base has risen. Cross-border operators continue to evaluate India market entry through the simplified registration route, balancing growth opportunity with compliance investment.

What players should know before depositing

Players entering an online gaming platform should understand the tax impact upfront. On a ₹1,000 deposit, GST of ₹280 is charged separately or built into the deposit price, leaving ₹720 in the wallet for play if charged on top or the full ₹1,000 if absorbed by the platform — platform pricing models vary. On withdrawal of net winnings, the platform deducts TDS at 30% under Section 194BA, paid to the income tax department. The TDS appears in the player's Form 26AS and AIS, requiring disclosure in the income tax return under income from other sources. Maintaining a wallet statement and TDS certificate is essential for accurate ITR filing.

Conclusion

The 28% GST on online gaming is now a settled feature of India's indirect tax landscape. For operators, the priority in FY 2026-27 is clean valuation under Rule 31B, timely returns and synchronised TDS compliance. For players, understanding that GST applies upfront on deposit while TDS applies on net winnings is essential to making informed choices.

Frequently Asked Questions

Is GST charged on the deposit or on the winnings?

GST at 28% is charged on the deposit — that is, on the full face value of the amount paid by the player to the platform. Winnings paid out to the player are not separately taxed under GST, and winnings retained or redeposited are also not retaxed under Rule 31B.

Do offshore gaming platforms need GST registration in India?

Yes. Offshore online gaming platforms supplying services to Indian players must take simplified GST registration in India. Non-compliance can lead to blocking of access under Section 14A of the IGST Act read with the Information Technology Rules.

Is online gaming GST applicable on games of skill?

Yes. For GST purposes, the distinction between game of skill and game of chance is no longer relevant. Any online money gaming where the player deposits money to win a prize attracts 28% GST on the deposit value, irrespective of skill or chance.

How does Section 194BA TDS interact with 28% GST?

GST at 28% is collected on the deposit, while Section 194BA mandates 30% TDS on net winnings at the time of withdrawal or at year-end. The two operate independently — one on inflow, the other on payout — and platforms must reconcile both for every player.