Online gaming companies await clarity as repetition taxation fears rise

economictimes.indiatimes.com:

Online gaming companies are worried that potential repetitive taxation could be a death blow as they wait for detailed notification from the law committee of the GST Council, which has announced a 28% goods and services tax on the industry. This could lead to 50-60% indirect tax burden on gamers as mostly they use their winning money to play another game, which would be taxed again, and so on, industry executives said.

“Every stakeholder has raised this issue. We believe that levying GST on face value at each game will severely impact the engagement of the user with the platform,” said Roland Landers, CEO of All India Gaming Federation, which represents companies such as Mobile Premier League, Zupee, and Gameskraft.

“It will make the cost per game prohibitive and may cause unsuspecting users to move towards illegal offshore gambling websites,” he told ET. “Additionally, this will make the business of Indian online gaming companies unviable and result in loss of investment for the investors,” Landers said.Also read: Online gaming companies seek more clarity on GST Companies have raised their concerns with government officials.

“We are aware of the concerns of the industry and will try to keep it simple and less complicated,” a senior finance ministry official told ET. “Some of the industry representatives said this will make taxation for online gaming higher than casinos,” the official said.Also read | Game over: Indian gaming companies fear thousands of job cuts after GST increase The GST Council had last week announced a28% GST on the turnover of online gaming companies, casinos and horse racing companies.