28 Percent GST On Online Gaming? Industry Reckons May 18 Could Be 'Doomsday'

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28% GST on Online Gaming? Industry Reckons May 18 Could Be 'Doomsday' for the online gaming sector. Centre has deflected the issue of gambling/betting to the states. Vice-President Venkaiah Naidu called skill-based games as "kill games" in Rajya Sabha. Niti Aayog almost came close to giving fantasy sports a clean chit but received objection from major online game operators.

Some of India's biggest celebrities promote online games played with stakes. Bollywood celebrities endorse gaming apps in a big way. Top real money gaming operators like Dream11, Winzo, MPL, My11Circle work closely with teams playing in the Indian Premier League. Indian gaming companies see IPL 2022 as a major threat.

The Group of Ministers (GOM) is set to sign off on a recommendation that casinos, race courses and online gaming must come under the 28 percent GST slab. The GoM is a powerful body comprising eight powerful ministers, led by the Chief Minister of Meghalaya Conrad Sangma. Online gaming companies currently pay 18 percent on Gross Gaming Revenue (GRR) or on the commission charged by platforms from players.

The IPL 2022 team sponsors are against imposing 28% GST on online gaming. They argue that it will deter marquee global players. Jay Sayta, a policy expert, believes the right approach is to keep the tax at 28%. He also believes that the gaming industry should pay their fair share of taxes. The right tax should be on the platform fees and not the entry fees.

The proposed 28% GST on online gaming is a major impediment for the industry. MPL is using its large base of gamers to educate women on social issues like trafficking. The industry is concerned that black market operators will siphon revenue from legitimate tax-paying operators. The government should focus on GGR methodology only. This will protect the gamers from moving to offshore black markets.

BCCI's Fantasy.com is a gaming platform that has rummy, among other real money games. Ganguly is the brand ambassador of a fantasy cricket company. The company is sponsoring the women’s T20 version of mini-IPL. BCCI did not respond to queries if 28% GST slab will impact its 'business' with gaming companies.