Finance Minister Nirmala Sitharaman yesterday said the valuation rules for levying 28 percent GST on entry-level bets on online gaming platforms are effective prospectively.

“The clarification on that (online gaming) was issued. 28 per cent is the tax and as to who it will apply to and on whom the incidence will fall is clearly explained… The valuation rules to exclude winnings is prospective. So, I hope there is not confusion on that,” Sitharaman said in the Lok Sabha, according to a PTI report from New Delhi.

The minister was replying to a discussion in the House on the GST (Second Amendment) Bill, which provides for capping the age limit for president and members of GSTAT.

This implies that bets placed from the winning amount on online gaming portals will not attract 28 per cent Goods and Services Tax (GST) with effect from October 1.

In its meeting in August, the GST Council had clarified that 28 percent GST is applicable on online gaming. Thereafter, amendments to the Central GST Act were cleared by Parliament in August to give effect to the decision of the Council. The effective date for the amendments was October 1. The amendments provide that GST will be levied on entry-level bets on online gaming platforms and not on what players pay in each game from the winning amount.

Giving an example, the Minister said if a bet is placed for, say Rs 1,000, and the player wins Rs 300, then if the player again places a bet of Rs 1,300, then GST will not be levied on the winning amount.