The GST Council is unlikely to reverse the 28% goods and services tax (GST) on the online gaming industry, despite concerns from industry stakeholders. According to sources close to the matter, the government believes the tax has been generally accepted by both players and companies, and the growth in tax collections from the sector supports this view.
As reported by Business Today, an insider noted, “It is unlikely that the 28% GST would be withdrawn. The industry and customers seem to have settled into it, as indicated by the steady increase in tax collections from online gaming.”
Earlier this month, The Financial Express reported that, according to an official, the government is considering providing some form of relief to the money gaming industry regarding retrospective tax claims. However, there is still uncertainty surrounding GST notices for past payments, which many companies find worrisome. Numerous firms have filed petitions on this issue, and these will be heard by the Supreme Court. “Many writ petitions have been filed on the issue and will now be heard by the Supreme Court. The ruling is being awaited by companies,” stated another source.
Additionally, companies have expressed concerns about their ability to pay GST on previous years’ transactions, as the funds were already disbursed to players. This matter is expected to be revisited by the GST Council after the General Elections and the formation of the new Union government. Sources suggest the Council may meet either in late June or post the Union Budget in late July.
The 28% GST on online gaming, casinos, and horse racing was introduced on October 1, with the Council promising a review after six months. The industry has voiced concerns that the high tax rate could deter players due to the substantial tax burden.
Industry experts and leaders are advocating for a reconsideration of the high tax rate to encourage further growth in the sector. Amrit Kiran Singh, President of the Skill Online Games Institute (SOGI), proposed measures such as implementing temporary restrictions for players who spend excessive time or money on online gaming in a single day. He emphasized the role of the online gaming industry as an economic driver, stating, “India will need at least two if not three or four growth engines to power us into the top economies of the world in terms of per capita income. The Online Games industry, due to its sheer size and the natural ability of Indians in this IT-related field, can help take India rapidly to the top, economically.”
The industry awaits the GST Council’s upcoming review with the hope that a more favorable tax regime will be established to support the sector’s expansion and contribution to the economy.
Source: G2G News
