'Implementation of 28% GST rate will bring challenges to online gaming industry'
Nirmala Sitharaman on Tuesday said that the GST Council has decided to impose 28% tax on the turnover of online gaming, horse racing and casinos on full face value. The panel, headed by the Union finance minister and comprising of representatives of all states and UTs, decided on tax rate based on recommendation of a group of ministers that looked at taxing casinos, horse racing and online gaming. The issue before the GoM (group of ministers) was whether to impose a 28 per cent GST on the face value of bets, or gross gaming revenue, or just on platform fees.
Sitharaman said the tax will be levied on the entire value. The tax on online gaming companies would be imposed without making any differentiation based on whether the games required skill or were based on chance. Industry executives said they may have to pass on taxes by raising the ticket prices of games.
"The implementation of a 28% tax rate will bring significant challenges to the gaming industry. This higher tax burden will impact companies' cash flows," Aaditya Shah, chief operating officer at the gaming app IndiaPlays, said to news agency Reuters. The All India Gaming Federation (AIGF), which represents companies like Nazara, GamesKraft, Zupee and Winzo, said the decision by the council is unconstitutional, irrational, and egregious.
"The decision ignores over 60 years of settled legal jurisprudence and lumps online skill gaming with gambling activities. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses and the only people benefitting from this will be anti-national illegal offshore platforms," AIGF CEO Roland Landers said. Roland Landers, CEO of The All India Gaming Federation, said the decision was
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