GoM likely to hike 18% GST, online gaming federation on disagreement

The online gaming federation states a disagreement on the upcoming GST council meeting where the Group of Ministers(GoM) is likely to hike the 18% GST on online gaming.

Big industry players like FIFS, Games 24x7, and E-Gaming Federation have suggested statistics and insights on why continuing the 18% GST on online skill gaming will help the industry thrive.

Any hike in GST by GoM, nominated by the GST council on online gaming would simply hamper the growth of the gaming industry and the Prime Minister's vision which include focus area on AVGC(Animation, Visual, Effects, Gaming, and Comic).

Economic growth, being driven by the Online Gaming sector – The sector has contributed Rs 1,450 crore for FY 21. The industry has attracted Rs 10,000 crore of FDI with a potential of Rs 15,000 crore more in the next three years. So increase in GST from 18 to 28 can adversely affect the numbers.

The online gaming industry is directly linked to the growth of several other sectors such as banking, payment gateway, telecom, fintech, sports, and entertainment. The online gaming industry has nearly 400 companies employing around 45,000 people.

A higher tax burden will make the industry unavailable to many customers, the federation said while stating that online gaming platforms have appealed to the government on numerous occasions to not treat skill-based online games the same as gambling while sharing a case in point on how a different and rational tax treatment of online skill-based games can help in eliminating non-compliance, leakage of revenue, and grey markets.