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NEW DELHI: India’s government said it would impose a 28% tax on funds that online gaming companies collect from their customers, in a blow to the $1.5 billion industry that has surged in popularity.
Finance Minister Nirmala Sitharaman said the decision to impose tax on the total amounts gaming companies collect was taken after consultation with states, and not aimed at targeting any particular industry.
Online gamers and industry stakeholders have reacted after India imposed a hefty 28% GST on gaming. Industry representatives said it would sap their earnings and the extra charges were likely to be passed on to customers
The gaming industry has decried the move as “unconstitutional, irrational and egregious”, saying decision will kill the skilled online gaming sector in the country.
All India Gaming Federation CEO Roland Landers said that the decision ignores over 60 years of settled legal jurisprudence and lumps online skill gaming with gambling activities.
“We believe this decision by the GST Council is unconstitutional, irrational, and egregious. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses and the only people benefitting from this will be anti-national illegal offshore platforms,” Landers said in a statement.
Industry experts said the levy of an 18% tax rate would have been helpful for the gaming industry. The said the online gaming industry has created over 2 lakh jobs. The industry leaders requested the GST Council and the government to reconsider this decision.
The gaming apps are endorsed by sporting heroes in India, where cricket is a national passion, but concerns have mounted over possible addiction and financial losses.
The apps have also attracted big investors. Until now, the companies paid a small tax on the fee they charged for offering real money games. The change announced on Tuesday will impose a 28% tax on the entire amount collected from players in every game.
RIP – Real money gaming industry in India. If the govt is thinking people will put in ₹100 to play on ₹72 pot entry (28% Gross GST); and if they win ₹54 (after platform fees)- they will pay 30% TDS on that – for which they will get free swimming pool in their living room come…
— Ashneer Grover (@Ashneer_Grover) July 11, 2023
Online fantasy sports industry is done and dusted by GST Council today.
As per news: state govts we’re pushing for this. Meanwhile Modi govt is working hard to build startup ecosystem, money hungry state govts wants to milk entire public to fund their pensions and revdis.…
— Ashu (@muglikar_) July 11, 2023
People need to know the difference between Online Gaming and video Games. 28% GST is applicable on Online gaming . Which includes Gambling and betting apps. Its best decision to reduce the addiction of youth towed gambling #GSTCouncilMeeting
— OG (@og_4999) July 12, 2023
Don’t really recall people celebrating online gaming startups such as Dream11.
They weren’t not needed in the first place.
Forget about solving problems, they created new problems for youth.
They paved their path to visarjan.
— Parth | Money and Investing 📈 (@ChoudhuryParth) July 12, 2023
