Indian Gaming Industry Reacts to GST Council Levying 28% Tax on Full Value of Online Gaming
Following its 50th meet in New Delhi, the Goods and Service Tax (GST) Council announced that it will levy 28% GST on the full value of online gaming, horse racing, and casinos.
The GST Council has decided to levy a 28% tax on the full value of online gaming, horse racing, and casinos. This means that the tax will be applied to the amount of money that is wagered, regardless of whether the game is skill-based or chance-based. The decision has been met with mixed reactions from the online gaming industry. Some companies have expressed concern that the high tax rate will make it difficult for them to compete with illegal offshore gambling sites. Others have argued that the tax will help to regulate the industry and protect consumers.
The GST Council has said that the tax is being imposed in order to “level the playing field” between online gaming companies and other forms of gambling, such as casinos and horse racing. The council has also said that the tax will help to raise revenue for the government. The effective date of the tax has not yet been announced. However, it is expected to come into effect soon.
Following its 50th meet in New Delhi, the Goods and Service Tax (GST) Council announced that it will levy 28% GST on the full value of online gaming, horse racing, and casinos. Further, the West Bengal GST Council Representative said that the council decided to make an amendment as these are actionable claims. The GST Council further agreed that there should be no distinction between a ‘game of skill and a game of chance.’
Mr. Sagar Nair, Co-founder, and CEO of Qlan, the Gamers’ Social Network:
“The decision of the GST council to impose a 28% tax will have a significant impact on the online gaming industry, which unfortunately includes the Esports community. While we understand that the government needs to impose such measures on casinos, horse racing, and gambling, the higher tax rate is not justified for the competitive gaming community. It can discourage new players from entering the market as their hard-earned earnings generated through their efforts just like mainstream athletes will be taxed on the same level as those involved in gambling and other such practices. For the Esports industry to continue its unprecedented growth and recognition on the international stage, it is vital for the government to treat Esports as a separate category with reasonable tax rates that would support the development of the sector.”
Mr. Rohit Agarwal, Founder & Director, Alpha Zegus, the next-gen marketing agency specializing in the domains of gaming & lifestyle:
“Yet again, esports being included in the same domain as online gaming, horse racing, and casino, has put our industry at a major disadvantage. While the government might have fair reasons to impose higher GST on horse racing and casino winnings, imposing the same rules on an industry like esports doesn’t seem fair. Esports does not only have a ‘win or lose’ situation basis luck but has a very big element of skill that determines the outcome of the game. This is not what I expected, and our fight to separate esports from other labels still continues.”
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