# GST on Online Gaming in India: What the 40% Rate Means Source: https://cricketin.org/legal/gst-on-online-gaming [By Farhan Qureshi](/authors/payments-expert), Payments Expert. [Reviewed by Rajeev Sathe](/authors/editor-in-chief), Editor-in-Chief. Updated 25 Aug 2026. Editorial policy: https://cricketin.org/editorial-policy 18+ Betting money on cricket carries a direct risk of financial loss, and it can become an addiction. Real-money online gaming is banned across India under the PROG Act 2025, which came into force on 1 May 2026. If betting is already costing you money you need, or sleep, or people close to you, the free Tele-MANAS helpline is **14416**, and it runs in 20 languages. Our [page on help for gambling harm](/guides/help-for-gambling-harm-india) lists what else exists. --- GST on online money gaming is 40% from 22 September 2025. What it is charged on, who pays it, and what the 2026 ruling on 28% covered. GST is a tax on the platform, not on you. The rate is 40%. It has been in force since 22 September 2025 ([PIB](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)). It is charged on the money you put in at entry. It is not charged on the cut the operator keeps. Before that the rate was 28%. On 27 May 2026 the Supreme Court upheld that older levy. It held the 2023 changes to be a clarification. So they reach back into earlier years. Below: the sums, the 28% history, and the ruling. This page also keeps GST apart from the 30% tax on your winnings. ## The rate today is 40% Start with the current number. GST on online money gaming is 40%. It has applied since 22 September 2025. The government says it plainly. “Yes, for all specified actionable claims including betting, casinos, gambling, horse racing, lottery and online money gaming, GST rate of 40% will apply” ([Press Information Bureau](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)). The rate came out of the 56th meeting of the GST Council. The same note dates the change to 22 September 2025 ([PIB](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)). CBIC then issued the rate notifications on 17 September 2025. The valuation rules for these claims were rewritten to fit ([EY India](https://www.ey.com/en_in/technical/alerts-hub/2025/09/cbic-issues-notifications-giving-effect-to-the-recommendations-made)). The old rate was 28% on the full stake. The Council set it in 2023 ([Economic Times](https://economictimes.indiatimes.com/tech/technology/gst-council-hikes-tax-on-online-real-money-gaming-and-betting-to-40-from-28/articleshow/123693478.cms)). That figure still matters here. It is the rate the Supreme Court ruled on in May 2026. ## Who actually pays the 40% Start here. This is the mix-up that ruins every other paragraph. GST is not your tax. It is a tax on the supply, and the supplier is the platform. The Supreme Court settled that on 27 May 2026. Gaming operators are not mere go-betweens, that is, not simple middlemen. They supply actionable claims ([Legal Republic](https://www.legalrepublic.in/supreme-court/gameskraft-gst-online-gaming-betting-gambling-supreme-court-2026/)). IBFD puts the same finding another way. Operators count as primary suppliers, because they run the games, the prize pools and the wallets ([IBFD tax news](https://www.ibfd.org/news/supreme-court-upholds-retrospective-gst-online-gaming-and-gambling)). So a GST demand lands on a company. It does not land in your inbox. Your own tax on winnings is a separate charge. It is taken at 30% under a different law ([the Income Tax Department](https://www.incometaxindia.gov.in/w/winnings-from-online-games)). We keep the two apart on [our page on tax held back from winnings](/legal/tds-on-winnings-india). ## What the 40% is charged on The rate is only half the story. The base is the half that hurt the industry. GST at 40% applies to online money gaming ([PIB](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)). The base is the sum you deposit at the entry stage. Past winnings put back into play are not charged again ([ICLG](https://iclg.com/practice-areas/gambling-laws-and-regulations/india)). The valuation rule is Rule 31B. It came in by Notification No. 45/2023-CT dated 6 September 2023 ([TaxGuru on GST valuation](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html)). Rule 31B is worth reading slowly. The value of supply is the total sum paid, payable or deposited with the supplier. It covers money or money's worth. Virtual digital assets are in scope. It counts what you pay and what someone pays for you. A refund by the supplier cannot be knocked off that value. Winnings you leave in and reuse do not count as a fresh deposit ([TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html)). The industry wanted a tax on its commission alone. That slice is sometimes called gross gaming revenue. The Court said no. It upheld tax on the full stake, not on the platform's cut ([the NLS bulletin](https://forum.nls.ac.in/may-2026-ijlt-tech-law-bulletin/)). IBFD records the same point. The taxable sum is the whole stake. Nothing comes off for prize pools or payouts ([IBFD](https://www.ibfd.org/news/supreme-court-upholds-retrospective-gst-online-gaming-and-gambling)). ## A worked example of the difference Numbers show why the base mattered more than the rate. The figures are ours. **Inputs** - Deposits taken from players in a period: ₹1,00,00,000 - Share the platform keeps as its fee: 10%, so ₹10,00,000 - GST rate on the supply: 40% **Two ways to compute the tax** On the platform fee only: 0.40 × 10,00,000 = ₹4,00,000 On the full deposit value: 0.40 × 1,00,00,000 = ₹40,00,000 **Result** The bill is ten times larger. It is also larger than the whole fee the platform took in. **Assumptions said out loud** The 10% fee is an illustration. It is not a measured figure from any operator. The 40% rate comes from [the Press Information Bureau](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2). The base comes from [ICLG](https://iclg.com/practice-areas/gambling-laws-and-regulations/india) and [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html). The full-stake valuation comes from [the NLS bulletin](https://forum.nls.ac.in/may-2026-ijlt-tech-law-bulletin/). Reused winnings and refunds are left out here. That keeps the sums clear. That is the arithmetic behind headlines about a sector collapsing. A tax base larger than a firm's revenue leaves two options. Change the model or stop. ## How the old 28% rate came in The 28% rate did not come from a court. It came from the GST Council. The story explains why the industry felt ambushed. It also explains the bills that are still live ([Economic Times](https://economictimes.indiatimes.com/tech/technology/gst-council-hikes-tax-on-online-real-money-gaming-and-betting-to-40-from-28/articleshow/123693478.cms)). The Council agreed to tax all online gaming. For tax, chance and skill were treated alike ([TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html)). The law followed fast. Table 1 lists the steps and the new definitions. **Table 1. The 2023 GST changes for online gaming** | Step or term | Detail | Source | |---|---|---| | CGST and IGST Amendment Bills, 2023 | Introduced on 11 August 2023 | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Enacted as Act Nos. 30 and 31 of 2023 | 18 August 2023 | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Section 2(80A) CGST Act | Defines online gaming | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Section 2(80B) CGST Act | Defines online money gaming | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Section 2(102A) CGST Act | Defines specified actionable claim | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Section 2(117A) CGST Act | Defines virtual digital asset | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Schedule III wording | “Lottery, betting and gambling” replaced by “specified actionable claims” | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Rule 31B | Valuation for online money gaming; Notification No. 45/2023-CT of 6 September 2023 | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Rule 31C | Parallel valuation rule for casinos, same notification | [TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html) | | Levy start date | 1 October 2023, on online money gaming and casinos, as a supply of actionable claims | [ICLG](https://iclg.com/practice-areas/gambling-laws-and-regulations/india) | Those definitions are the plumbing behind the whole dispute. The Court then held that the same changes only clarified a position that already existed ([Legal Republic](https://www.legalrepublic.in/supreme-court/gameskraft-gst-online-gaming-betting-gambling-supreme-court-2026/)). ## What happens when you reuse winnings One part of Rule 31B softens the maths. It is worth knowing, because it is often quoted wrongly. Money you win and leave in play is not a new deposit ([TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html)). ICLG says the same in one line. GST is not levied when winnings from past bets go back into play ([ICLG](https://iclg.com/practice-areas/gambling-laws-and-regulations/india)). An example from our source shows the split. Bet ₹10,000 and win ₹3,000. Play on with ₹13,000, and no GST is due again on that ₹3,000. Now lose the ₹10,000 and put in another ₹10,000. The fresh money is taxed ([TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html)). Refunds work the other way. A sum returned by the supplier cannot be knocked off the value of supply. The reason for the refund does not matter ([TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html)). So a cancelled contest does not shrink the tax base. The design is deliberate. The tax bites when money enters the platform. Little that happens later moves it. ## "Retrospective" means old years get bills Retrospective sounds technical. In plain terms, a rule reaches back into years that were already closed. On 27 May 2026 the Court ruled on the 2023 changes that set the 28% levy. Those took in the change to Entry 6 of Schedule III, plus the new Rules 31B and 31C. The Court held they were only a clarification. So they work back in time. They did not create a fresh levy or a new taxable event. They gave clarity on valuation and collection ([Legal Republic](https://www.legalrepublic.in/supreme-court/gameskraft-gst-online-gaming-betting-gambling-supreme-court-2026/)). IBFD reports the same conclusion ([IBFD](https://www.ibfd.org/news/supreme-court-upholds-retrospective-gst-online-gaming-and-gambling)). The Indian Express explains the effect for the sector. The 28% levy was meant to start on 1 October 2023. Treating the changes as a clarification let the tax reach earlier periods ([Indian Express](https://indianexpress.com/article/explained/explained-law/supreme-court-online-gaming-gst-verdict-retrospective-tax-demand-10711935/)). The money involved is large. Show cause notices of over ₹21,000 crore against Gameskraft were restored. With interest and penalty the reported figure was ₹2,09,89,31,31,501. Those notices are dated 23 September 2022 and were issued under Section 74(1) of the CGST Act ([Legal Republic](https://www.legalrepublic.in/supreme-court/gameskraft-gst-online-gaming-betting-gambling-supreme-court-2026/)). Across the sector the revived demands were put at close to ₹2.5 lakh crore ([Indian Express](https://indianexpress.com/article/explained/explained-law/supreme-court-online-gaming-gst-verdict-retrospective-tax-demand-10711935/)). ## What the 2026 judgment did not change Two dates get mixed up all the time. Keep them apart. The rate rose to 40% on 22 September 2025 ([PIB](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)). The Court ruled later, on 27 May 2026. That ruling was about the 28% levy and its base. It did not set the rate you see today. A rate change moves the size of a supplier's bill. It does not move your own position under the ban. Money games stay banned under the PROG Act 2025. That Act is in force from 1 May 2026 ([Nishith Desai](https://nishithdesai.com/research-and-articles/hotline/gaming-law-wrap/setting-the-rules-of-the-game-indias-online-gaming-law-comes-into-force-15586)). ## GST and the 30% on winnings are not the same thing Readers merge these two all the time. A table splits them cleanly. **Table 2. GST on gaming supply against income tax on winnings** | Point | GST | Tax on winnings | |---|---|---| | Who is liable | The platform, as supplier of the actionable claim | You, the person with the winnings | | What is taxed | The amount deposited with the supplier at entry | Net winnings for the year, per account | | Rate | 40% since 22 September 2025 ([PIB](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)); the 2026 ruling was about 28% | Flat 30% | | Collected how | By the supplier, in its GST returns | Withheld before payout, then reported in your return | | Source | [IBFD](https://www.ibfd.org/news/supreme-court-upholds-retrospective-gst-online-gaming-and-gambling), [ICLG](https://iclg.com/practice-areas/gambling-laws-and-regulations/india) | [Income Tax Department](https://www.incometaxindia.gov.in/w/winnings-from-online-games) | One practical result. You will never see a GST line you can claim back. It sits inside the platform's own economics. The 30% is the number that shows up on your payout, and [our TDS page](/legal/tds-on-winnings-india) shows how it is worked out. ## A side note on the 18% figure you may see Some older articles quote 18% for online gaming. That confuses people further. There is a reason for the number. Online gaming can be treated as an online information and database access or retrieval service. The short name is OIDAR. Framed that way, GST is 18%. It is charged on the fee or commission the operator takes. ICLG adds that the right treatment turns on the business and gaming model ([ICLG Gambling Laws and Regulations, India](https://iclg.com/practice-areas/gambling-laws-and-regulations/india)). So both numbers exist in the writing on this. They describe two ways of framing one activity. The 27 May 2026 judgment pushed stake-based play firmly into the betting and gambling box. There, the stake is the base ([the NLS bulletin](https://forum.nls.ac.in/may-2026-ijlt-tech-law-bulletin/)). Our [case tracker](/legal/supreme-court-online-gaming-cases) sets out the judgment itself. ## Offshore operators are inside the GST net too A firm based abroad does not sit outside this. The CGST change made registration a must for anyone supplying online money gaming from outside India to a person here. Section 14A of the IGST Act adds the machinery. It gives one simplified registration and a way to pay integrated tax. It also allows blocking where the supplier will not register or will not pay ([TaxGuru](https://taxguru.in/goods-and-service-tax/supplies-online-gaming-casino-gst-implications.html)). ICLG states the same duty. It adds that GST officers can block the platforms of foreign operators that do not comply ([ICLG](https://iclg.com/practice-areas/gambling-laws-and-regulations/india)). That is a tax power. It sits apart from the blocking power in Section 14 of the PROG Act ([India Code](https://upload.indiacode.nic.in/view-casepdf?type=act&id=AC_CEN_45_0_00004_2025-32_1778133559220)). Two laws, two switches, one result on your screen. See [our page on offshore apps](/legal/offshore-betting-apps-india). ## What all this means for an ordinary reader Five takeaways, in plain order. - The rate is 40% now. It has applied since 22 September 2025 ([PIB](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)). - GST is the platform's problem. It is not a bill you get ([Legal Republic](https://www.legalrepublic.in/supreme-court/gameskraft-gst-online-gaming-betting-gambling-supreme-court-2026/)). - The stake is the taxable value, not the platform's cut ([the NLS bulletin](https://forum.nls.ac.in/may-2026-ijlt-tech-law-bulletin/)). - Old years were reopened. That is why so many gaming firms left ([Indian Express](https://indianexpress.com/article/explained/explained-law/supreme-court-online-gaming-gst-verdict-retrospective-tax-demand-10711935/)). - None of it makes playing lawful. The same day, the Court confirmed that states may ban online money games, skill or no skill ([Bar and Bench](https://www.barandbench.com/news/litigation/supreme-court-upholds-28-gst-levy-on-online-gaming-bets-says-skill-chance-irrelevant-if-money-staked)). The central ban is already in force ([Nishith Desai](https://nishithdesai.com/research-and-articles/hotline/gaming-law-wrap/setting-the-rules-of-the-game-indias-online-gaming-law-comes-into-force-15586)). For the legal position, start with [the 2026 answer on legality](/legal/online-betting-law-india) and [the guide to the Act](/legal/prog-act-2025-explained). The full map is on [the legal hub](/legal). Does a figure here change? Our [corrections policy](/corrections) is how we record the fix. ## Questions people ask ### Do I have to pay the 40% GST on my deposit? The tax is on the supplier. Operators were held to supply actionable claims. They are not go-betweens ([Legal Republic](https://www.legalrepublic.in/supreme-court/gameskraft-gst-online-gaming-betting-gambling-supreme-court-2026/)). The cost may still sit inside the platform's pricing. ### Is GST charged on my winnings as well? No. Winnings are taxed under income tax law. The rate is a flat 30% on net winnings ([Income Tax Department](https://www.incometaxindia.gov.in/w/winnings-from-online-games)). GST works on the deposit value instead. ### What does retrospective GST mean here? The 2023 changes were held to be only a clarification. So they apply to periods before 1 October 2023 ([Indian Express](https://indianexpress.com/article/explained/explained-law/supreme-court-online-gaming-gst-verdict-retrospective-tax-demand-10711935/)). ### Why do some pages say 18%? Because online gaming can also be framed as an OIDAR service. That is taxed at 18% on the operator's fee ([ICLG](https://iclg.com/practice-areas/gambling-laws-and-regulations/india)). The Court applied the stake-based framing. ### What is the GST rate on online gaming now? It is 40%, in force since 22 September 2025. The government note says the 40% rate covers all specified actionable claims ([Press Information Bureau](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2163560®=3&lang=2)). CBIC issued the notifications on 17 September 2025 ([EY India](https://www.ey.com/en_in/technical/alerts-hub/2025/09/cbic-issues-notifications-giving-effect-to-the-recommendations-made)). ## More from the legal hub - [Offshore Betting Apps in India](/legal/offshore-betting-apps-india) - [Is Online Cricket Betting Legal in India](/legal/online-betting-law-india) - [PROG Act 2025 Explained](/legal/prog-act-2025-explained) - [State Gambling Laws in India](/legal/state-by-state) - [Supreme Court on Online Gaming](/legal/supreme-court-online-gaming-cases) - [TDS on Online Gaming Winnings](/legal/tds-on-winnings-india) - [Online Gaming Ad Rules in India](/legal/advertising-rules-online-gaming) - [Cricket Betting Glossary](/guides/cricket-betting-glossary) - [Cricket Formats Explained](/guides/cricket-formats-explained) - [Caribbean Premier League 2026 — live schedule and table](/leagues/cpl)