comscore GST council could impose 28 percent GST on online gaming

Betting and gambling games could attract 28 percent GST, could hamper the growth of online gaming industry in India

The GST council could impose 28 percent GST on online gaming platforms like RummyCircle, Dream11, and others.

Betting Games

Whether it be smartphone games or PC/console games, the gaming industry in the Indian market is on the rise and it doesn’t seem to slow down. Especially, if we look at online gaming platforms such as RummyCircle, Dream11, and others that advertise lucrative prize money. Also Read - Hiking GST on online gaming from 18% to 28% will negatively impact industry, say experts

However, on June 28, which is tomorrow, the GST Council will decide upon the tax slab that will be applied to online gaming. And this could potentially have negative implications for the avid online gamers, mainly those who play betting, gambling, and lottery games, where they have to deposit a certain sum of money to participate in tournaments. This could also hamper the growth of these gaming platforms. Also Read - Govt to finalise GST on online gaming in August 2022, says FM Nirmala Sitharaman

Govt may impose 28 percent GST on online gaming

The fantasy sports games played on the Internet require users to deposit or invest some money in order to participate and win real cash prizes. Such games include betting, gambling, and lottery games (in some cases). This money invested by each user then forms the total prize pool of the game, and at the same time, the platform takes its commission too from this for providing the service. Also Read - Government of India sets up a seven-member committee to regulate online gaming industry

As of now, 18 percent GST is levied on this fee, which is called gross gaming revenue (GGR). Now, however, in the forthcoming GST Council’s meeting, a 28 percent GST could be amended on the gross gaming value (GGV), which is the total amount deposited by users. And this is worrying the game companies.

“Applying GST on GGV will lead to an almost 900 percent increase in taxes, which will kill the emerging gaming industry,” said Amrit Kiran Singh,  All India Gaming Federation (AIGF).

Owing to this, game companies could pass on this tax burden to players by reducing the total prize pools, which could then lower the investments players make on such platforms.

Some experts say that this could let many online gamers leave betting platforms like fantasy sports, rummy, and poker. It could further force Indian online gaming companies to move overseas.

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  • Published Date: June 27, 2022 4:38 PM IST

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