Shiva Joshi, Pune
The GST Council’s plan, which is going to prevent gamers from paying taxes again, has been welcomed by the online gaming sector. However, the sector has expressed concern about the proposal to impose a 28% goods and services tax on all purchases.
The GST Council decided on Wednesday that the tax will be applied to the “amount paid or payable to or deposited with the supplier (of services), by or on behalf of the player (excluding the amount entered into games/bets out of winnings of previous games/bets) and not on the total value of each bet placed”, eliminating the possibility of repetitive taxation.
The council did, however, make it clear that the platform charge and the gross gaming revenue (GGR) would not be subject to the 28% GST.
“We appreciate the government addressing the industry’s concerns on the issue of repeat taxation,” Federation of Indian Fantasy Sports (FIFS) and E-Gaming Federation (EGF), said in a joint statement.
“The new tax framework, while clarifying and resolving uncertainty, will lead to a very burdensome 350% increase in GST and set the Indian online gaming industry back several years,” it said.
The country’s gaming industry will, however, get an opportunity to reinvent itself and lay new groundwork, it was stated.
50 online gaming businesses are represented by the two organisations, including Dream11 and Games 24×7.
The worry of recurrent taxation was avoided with this move, according to a top executive at an online real-money gambling company, but the tax on low-level deposits will still negatively affect customers.