‘New GST rate has sent sector back by months’
Edited excerpts: We started 2023 with the clarity that MeitY is our nodal ministry. That was a significant development for us. Finally, we had a body to go to with our thoughts, concerns and questions.
The change in TDS (tax deducted at source) and the creation of a new section for the online gaming industry was also a progressive step for this technology-driven entertainment sector. This was followed by the draft rules for the industry, which further reflected the government’s commitment towards the sector by keeping illegal and illegitimate platforms at bay. The levy of the new rate of GST on the industry, which is among the highest in the world, has definitely set the industry back by many months.
However, it provides clarity on the taxation framework, giving businesses a chance to rebuild and reboot. The next year will be crucial as operators come to terms with these changes. From what we understand, the two concerns the government has right now are national security, including issues like money laundering, and consumer protection.
Recent examples of illegitimate operators have added to these worries. To address both those things, you really need to have regulations. A well-thought-through regulatory framework can provide the legitimate online skill gaming industry much-needed fillip.
It will enable the government to distinguish between the authentic and the illegitimate operators, and make certain that safeguarding consumer protection remains a central focus. The gaming industry is probably the first industry in the history of our country that has gone to the government and said, you regulate us. At the end of the day, it is important.
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