The government has notified the way it will calculate the GST of 28 per cent on online gaming companies and casinos.

The total sum deposited for online gaming or in casinos will be taxable.

If a player does not use the full sum for some reason and takes a refund — even then the GST will apply on the full sum and there will be no deductions on account of the refund.

According to the notification, the value of the supply of online gaming, including supply of actionable claims involved in online money gaming, shall be the “total amount paid or payable to or deposited with the supplier by way of money or money’s worth, including virtual digital assets, by or on behalf of the player.”

Any amount returned or refunded by the supplier to the player for any reason, including the player not using the amount paid or deposited with the supplier for participating in any event, shall not be deductible from the value of the supply of online money gaming.

In terms of casinos, the value of the supply of actionable claims in a casino shall be the total amount paid or payable by the player for buying tokens, chips, coins or tickets. There will be no relief in the event of any refund.

Deployment of the winning amount for further play will not be subject to GST.

However, if the player takes back the winning amount and again deploys the sum for play, the sum will be taxed.

In case winning amount is not redeployed, it will be subject to Income Tax. Abhishek Malhotra, managing partner TMT Law Practice, said: “Instead of effectively settling the ambiguity around the issue of valuation of supply, the amendments seem to add to the uncertainty.”