Gaming Tax: GST Council to review 28% slab after six months
As per reports, Finance Minister Nirmala Sitharaman said that this decision was unanimous with only a handful of states opposing the decision.
The Goods and Services Tax (GST) Council on Wednesday said it would review its decision on imposing a 28% tax on online gaming and casinos six months after it is implemented on October 1.
The development confirms that the government will continue with its decision, after much protest from the online gaming companies.
As per reports, Finance Minister Nirmala Sitharaman said that this decision was unanimous with only a handful of states opposing the decision.
"The heavy tax burden will be detrimental for gaming companies and gamers, trickling to the livelihoods of game developers who make the game. The blanket provision on skill and chance games further muddles due process," Shivani Jha, a tech policy lawyer, told YourStory, in a statement.
According to a Reuters report, the government has decided to levy taxes on online gaming companies on the total funds deposited to play online games and not on every bet, the finance minister said, offering some relief to the nascent $1.5 billion industry.
All India Gaming Federation (AIGF) issued a statement reiterating a need to reconsider the rates after the stipulated six-month period.
"As the oldest and largest apex industry association for online gaming and the voice of MSME gaming startups, we sincerely hope that as mentioned in the meeting, there will be a rethink after six months and a stable and progressive regime can be proposed, which will help the industry grow, provide safe platforms to digital nagriks, while increasing tax revenues and contributing to the vision of India becoming a global gaming powerhouse," AIGF said in a statement.
"We believe the decision by the GST Council of valuation on deposits will severely impact the online gaming sector and result in a situation where a majority of players, including the MSMEs will no longer be able to survive in the face of the increased tax liability of 400-500%," it added.
On July 11, several online gaming firms came out against the decision, with some terming it as a body blow to the industry. Players and onlookers in the space also warned that the transition to a higher tax slab in online gaming is likely to result in gamers migrating to platforms outside India to avoid paying taxes altogether.
Edited by Suman Singh
