Online Gaming Tax Increment To Take Place With 40% Hike?

Online Gaming Tax Increment: On Friday, August 15, 2025, Prime Minister Narendra Modi addressed the nation from the Red Fort to mark India’s 79^th Independence Day. In his address, he mentioned that GST 2.0 would be imposed for the next generation of the country.

The PM’s Address to the Nation on the GST system

He stated that the government has shifted most of the good to new tax slabs. 90% of the goods and services that fall under the 28% GST slab will be shifted to 18% GST slab. Similarly, 99% goods and services under the 12% GST slab may get shifted to the 5% GST slab.

The initial GST structure of India had 4 tax slabs, including 5% GST, 12% GST, 18% GST, and 28% GST. It is now being referred to as GST 1.0. The new GST 2.0 structure only has 5% and 18% GST slabs.

New GST’s effect on online gaming tax rates

Online gaming has been categorized as sin goods since the GST 1 was introduced in July 2017. This implyed a 28% tax on online games from the beginning of GST. This is about to change in GST 2.0.

In his address, Prime Minister Narendra Modi also talked about a new tax slab for the luxury and sin goods section. This slab will be at 40% GST rates. So, the major chance that the online gaming industry is about to witness is its GST going from 28% to 40% under the new taxation system.

Reportedly, the 40% tax slab includes a total of 7 items, including online games. Some of them are: tobacco products, alcohol, online gaming/betting, pan masala, etc. The other items that are expected to join the list include aerated drinks and high-end cars. But an official confirmation is yet to be made to make things clearer.

From when will the new GST be implemented?

In the statement made by Prime Minister Modi, the GST 2.0 is a Diwali gift for all Indians. He has specifically mentioned that this gift is for his country’s next generation and is expected to be implemented during Diwali 2025.

A special GST council meeting is announced in September 2025, where the high-level discussions related to new GST changes will be discussed. After this, there are chances of getting an official date for the implementation of the new GST slabs.