Killer Blow: 28% GST on Online Gaming Threatens Industry Growth and Jobs

🎮 Killer Blow: 28% GST on Online Gaming Threatens Industry Growth and Jobs

The gaming industry in India has been dealt a severe blow with the announcement of a 28% Goods and Services Tax (GST) on the full value of online gaming, horse racing, and casinos. Industry experts are expressing their concern, stating that this decision is retrograde and will have far-reaching negative consequences for the sector.

Joy Bhattacharjya, Director General of the Federation of Indian Fantasy Sports (FIFS), described the decision as unfortunate and terrible for the industry. He emphasized that not only will it impact consumers who will receive less value for their money, but it will also discourage foreign direct investment (FDI) in the sector.

The move by the GST council comes after much deliberation and is expected to take effect after amendments are made to the laws. However, a report by Deloitte highlights that this decision could lead to a significant decline in tax revenue over the next five years and negatively impact the industry's revenue.

Roland Landers, CEO of the All India Gaming Federation, believes that this decision will not only wipe out the entire gaming industry but also benefit illegal offshore gambling companies. He further emphasized that the decision overlooks decades of settled legal jurisprudence and unjustly categorizes online skill gaming with gambling activities.

The implications of this decision are substantial. It will not only hamper the growth and survival of startups in the industry but also lead to job losses. The $4 billion FDI that was anticipated for the sector is now at risk, as this decision creates an uncertain and unfavorable business environment.

The gaming industry had seen positive developments in recent times, with the Ministry of Electronics and Information Technology (MeitY) introducing fair rules and regulations. This decision, however, seems to undo the progress made and undermine the government's efforts to support the industry.

It is crucial to recognize that the gaming industry plays a significant role in the digital economy, and hindering its growth could have broader implications. The Indian gaming industry has immense potential, and curtailing its progress through high taxes will only push consumers towards illegal offshore platforms.

As industry representatives, we urge the government to reconsider this decision and explore alternative approaches. Taxing the industry at 28% on the full value rather than gross gaming revenue is a significant setback. We propose a collaborative dialogue between industry stakeholders and government authorities to find a more balanced and sustainable tax structure that nurtures the industry's growth.

The gaming industry has been a beacon of innovation and technological advancement in India, attracting talent, driving economic growth, and offering entertainment to millions of gamers. Let us not stifle this industry's potential with an unjust and detrimental tax policy. Together, we can create an environment that fosters growth, encourages investment, and ensures the gaming sector flourishes while contributing to the nation's digital economy vision.

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