The Goods and Services Tax (GST) Council has announced that bets placed in online gaming, horse racing, and casinos will now levy a 28 per cent tax at full value. This means that gamers in India will now have to pay an additional 28% tax on the amount they spend on online games.
The decision to levy 28% GST on online gaming was made by the GST Council in its 50th meeting on July 11, 2023. The council said that the decision was made " considering the moral question" that online gaming cannot be taxed at par with essential commodities.
The 28% GST on online gaming is likely to have a significant impact on the gaming industry in India. First, it will likely lead to an increase in the cost of online gaming for consumers. Second, it could discourage new players from entering the market. Third, it could lead to an increase in the number of illegal online gaming platforms.
It remains to be seen how the 28% GST on online gaming will impact the industry in the long term. However, it is clear that the decision will have a significant impact on the growth of the industry in India.
Online gaming companies have reacted negatively to the decision to levy 28% GST on their industry. The All India Gaming Federation (AIGF), which represents companies like Winzo, Zupee, GamesKraft, and Nazara, described the decision as unconstitutional, irrational, and egregious.
BhartPe founder Ashneer Grover strongly criticized the GST council's decision to impose a 28% tax on online gaming. He expressed his concerns about the suddenness of the judgment and India's regulatory risks. Grover even predicted that tech companies might relocate to places like Dubai or Singapore. In response to a Twitter user pointing out policy inconsistency.
RIP - Real money gaming industry in India. If the govt is thinking people will put in ₹100 to play on ₹72 pot entry (28% Gross GST); and if they win ₹54 (after platform fees)- they will pay 30% TDS on that - for which they will get free swimming pool in their living room come…
— Ashneer Grover (@Ashneer_Grover) July 11, 2023
"Why judgment on online gaming now? Everyone from Virat Kohli to MS Dhoni to Sourav Ganguly has endorsed online gaming. Why was India public/Govt/BCCI not outraged by all cricketers endorsing? Why was BCCI allowed to take Dream 11 as the title sponsor? Sab Doglapan hai -Tech founders are dispensable - that’s the only truth."
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