Indian Gaming Industry Proposes New GST Levy Formula to Government

The Indian online gaming industry has put forward a new formula to the government regarding the levy of the Goods and Services Tax (GST) in an effort to safeguard their interests and protect the gaming ecosystem.
Call of Duty gamingAccording to reports, the gaming industry has suggested a 28 percent GST levy on the sum total of net deposits at the company level, as opposed to the current system of levying the tax on gross deposits.

The proposal comes in response to a recent decision made by the GST Council on July 11, led by Finance Minister Nirmala Sitharaman. The council had decided to impose the highest slab of 28 percent GST on the entire value of money paid by users for playing skill-based games, with no distinction between games of skill and chance. Presently, gaming platforms are subjected to an 18 percent GST.

The Indian gaming industry argues that applying the 28 percent GST on gross deposits could be detrimental to its overall health and may severely impact real-money gaming formats, such as rummy and poker. This is due to the potential reduction in overall prize money, which could significantly hamper the attractiveness of these gaming formats.

Industry stakeholders are keen on the government’s consideration of their proposal as they believe that the suggested formula would better balance the tax burden without stifling growth and innovation within the sector.

The matter is set to be discussed during the upcoming virtual meeting of the GST Council, scheduled for August 2. Gaming industry representatives are hopeful that their proposal will be taken into account during the meeting, allowing for a fair and sustainable GST levy that supports the industry’s continued development while ensuring appropriate tax collection for the government.