Garima Ranjan, Pune
The news coming ahead of the online gaming industry with stakes involved having to pay a price of 28% GST is because gaming which is now one of many booming industries, has now come to a point where people are getting addicted to it and spend a lot of time playing games. This has been opposed by the industry as it might harm and show a direct impact on countries’ foreign direct investment, but the government feels to do it under obligation as the number of hours spent playing is coming in the way of development, and also it will help protect tax revenues.
Another vertical to look at it would be through the wagering angle because, with gaming and the current industry, betting on games has also become a common sight. It’s a competitive indoor sport now, which in ways promotes betting and excessive liquidity in the market. To curb and check on such transactions, tax collected on source with 28% GST is what was proposed in the meeting. There will be only an 18% tax incurrence from games played without stakes. Wagering involved with the gaming industry needs to be worked and checked upon to protect both inshore and offshore plays at bay. This move can also attract a lot of illegal businesses. A close check on payment channels will have to be in place.
To look at it from the revenue perspective, government revenue will see an upward shift with double revenue generation from the last financial year.
If curbs and measures are effective in that case, the social purpose gets fulfilled. Not all states in the country and all stakeholders will take this amendment on the face value, but these measures are taken primarily to serve the social cause of the addiction-free gaming industry, wagering, and also wrt; revenue generation for the government. Understanding where TCS (tax collected at source) is the bridge to a social cause and revenue generation is a developing debate for us to delve into in the future.