25.07.2023: 28% GST only applicable to iGaming; will not affect video game industry: Esports Federation

Esports Federation of India (ESFI) clarified in a statement on July 24 that the goods and services tax (GST) at 28 percent on full-face value will be levied on online gaming and will not have an impact on Esports.

“The 28 percent GST is going to be applicable to the iGaming sector, including real-money gaming (RMG), fantasy sports, teen patti, rummy, and poker which are categorised under gambling or betting in the rest of the world. Contrary to some media reports, this GST is neither applicable nor will it have any impact on the ‘video games’ or the Esports industry,” said Vinod Kumar Tiwari, President of Esports Federation of India (ESFI), who is also Director (NOC & International Relations/Marketing Department) at the Olympic Council of Asia.

He added that Esports has been officially recognised as a sport by the government, which distinguishes it from any and all activities like iGaming such as fantasy, teen patti, rummy, poker, betting, and gambling, among others.

“It will carry on to be taxed the way it always has been (at 18 percent). Theories of ‘game of skill' and ‘game of chance', which only exist in our country neither apply nor are relevant in the Esports ecosystem,” Tiwari said.

In April this year, the government made amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 to lay out a comprehensive framework for the online gaming ecosystem.

Tiwari said that instead of using the umbrella term of ‘online gaming', the GST Council should have ideally used the more specific term ‘iGaming', which is known worldwide, or even ‘online real-money game' that is defined in ”The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules' to avoid the confusion.

“The objective of the 400 million Indian video gamers and approximately 3 billion gamers worldwide is ‘entertainment’ and not financial gains or making money. It is regrettable that in India, our video games or Esports industry is often associated with ‘iGaming, betting, RMG (real-money gaming), gambling and many more, which creates unnecessary confusion and misperceptions,” he said.

Tiwari added that it is also crucial to highlight that video game publishers have strict policies against implementing entry fees for any Esports events organised using their video games, further separating it from iGaming.

Esports is going to make its debut as an official medal sport at the 19th Asian Games where India will be participating in four titles – League of Legends, FIFA Online 4, Street Fighter V: Champion Edition, and DOTA 2.

Moreover, Esports has recently been officially designated as one of the medal sports in the 20th Asian Games Aichi-Nagoya 2026. In 2018, Esports was included at the Asian Games as a demonstration title.

Source: Money Control 

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