Amidst the ongoing disagreement between Raj Bhavan (Governor House) and the Left government in the Indian state of Kerala, state Governor Arif Mohammed Khan on Friday signed an ordinance amending the state’s Goods and Service Tax (GST) law concerning gambling.

News agency Press Trust of India (PTI) cited Raj Bhavan sources who confirmed that Khan has signed the ordinance. The Governor can initiate ordinances when a legislative assembly is not in session.

The ordinance was promulgated by the state government after the 50th GST Council meeting had fixed 28 percent GST on gambling at casinos, horse racing, and online gaming and had also decided that the tax should be levied on the face value of the bet.

The ordinance includes provisions to remove some of the ambiguities in the existing GST law concerning betting for money including online gaming, betting at casinos, and horse racing, the government had earlier said.

Last year, at the 50th GST Council, Indian Union Finance Minister Nirmala Sitharaman confirmed that the 28% GST on full face value would be implemented. The GST council also finalized the modalities for the determination of supply value in online gaming and casinos for levying the tax.

The 28% GST, in the case of online gaming, applies only where wagering is involved and not to any services provided by those hosting casual games. Previously, online betting and gambling were taxed at 28% GST, while other games were taxed at 18% of gross gaming revenue. 

Sitharaman had announced the hike in taxes for online gaming, horse racing, and casinos, after several deliberations with the GST Council. Speaking at a press conference, Sitharaman noted that the GST Council would come back with a position review after six months from October 1, 2023. This meant that from October 1st, all states would be required to clear changes to state GST laws in this regard, regardless of their views on the tax.