“Union Minister Rajeev Chandrasekhar to Revisit GST Council for Review of 28% Tax on Online Real-Money Gaming”
Rajeev Chandrasekhar, the Union Minister of State for Electronics and Information Technology, has announced that the government will revisit the GST council to reconsider the 28% tax rate imposed on online real-money gaming. The move follows the introduction of a new regulatory framework and aims to create a predictable and sustainable environment for the industry.
In a significant development for the real-money gaming industry, Union Minister Rajeev Chandrasekhar has expressed his intention to approach the GST council and request a reconsideration of the recently imposed 28% tax levy. The decision to review the tax rate comes in the wake of the government’s efforts to establish a robust regulatory framework for online gaming in India.
The GST Council’s decision to impose a uniform 28% GST slab on the total amount paid by users for skill-based games, without distinguishing between games of skill and chance, had caused shockwaves throughout the industry. Industry executives and associations have voiced concerns about the potential impact, warning that it could result in the decimation of the entire sector and lead to job losses.
In response to these concerns, a group of approximately 130 real-money gaming startup founders, CEOs, and industry associations penned an open letter to the government, urging them to reconsider the decision and provide an opportunity for dialogue. Prominent companies such as Gameskraft, Nazara Technologies, Mobile Premier League, WinZO, Adda52, Head Digital Works (A23), CrickPe, and industry associations like All India Gaming Federation, E-Gaming Federation, and Federation of Indian Fantasy Sports were among the signatories.
It is important to note that the 28% tax rate does not apply to free-to-play and paid video games, as the 18% GST rate is already included in the app sales on platforms like Google Play and Apple App Store.
During a recent town hall event, Minister Rajeev Chandrasekhar clarified that the GST Council is a federal organization representing all state governments. He emphasized that the decision was the outcome of years of work and consultations, aimed at creating a regulatory framework for online gaming. The minister emphasized the need for a progressive and sustainable approach, in line with the vision of Prime Minister Narendra Modi to build a digital ecosystem for the next decade.
According to a FICCI-EY report, the real-money gaming segment accounted for 77% of India’s gaming sector revenues in 2022, amounting to Rs 13,500 crore. The report also projects substantial growth, with revenues expected to reach Rs 16,700 crore in 2023 and Rs 23,100 crore in 2025.
As the government continues its efforts to establish a comprehensive regulatory framework, the review of the GST levy on online real-money gaming represents a potential turning point for the industry. It reflects the government’s willingness to consider the concerns of stakeholders and create a sustainable and conducive environment for online gaming in India.
Sources By Agencies
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