Online gaming industry once again urges government to reconsider 28% GST policy

The Indian online gaming industry, valued at over $3.5 billion, has called on the government to reconsider the 28% GST on Contest Entry Amount (CEA). The Skill Online Games Institute (SOGI) argues that this high tax rate hampers domestic companies and restricts the industry's growth potential.

Call for GST relaxation

SOGI Founder President Amrit Kiran Singh noted that the shift from an 18% tax on gross gaming revenue to CEA in October has not only financially burdened legitimate domestic platforms but also inadvertently promoted illegal offshore betting and gambling activities. Singh emphasized the need to reassess the GST policy to curb these unintended consequences and support the domestic industry's growth.

"The shift from 18 per cent on gross gaming revenue to CEA in October last is not just a financial burden on legitimate domestic platforms but also unintentionally bolstered illegal offshore betting and gambling activities," SOGI Founder President Amrit Kiran Singh said.

Singh expressed concerns that the high tax rate is pushing Indian companies out of business, while foreign companies, especially those from China where such taxes are absent, gain a competitive advantage. He mentioned that the government had agreed to review GST rates on online gaming post-election and urged that this review be conducted with a comprehensive study of the Indian and global online gaming landscape.

Singh also requested that the government consider the taxation models of other countries like the US, the UK, and China. To this end, SOGI is collaborating with the University of Oxford to study global regulations and tax structures for online gaming.

The industry highlights its potential for job creation and economic growth, currently employing over 2 lakh people and growing at a rapid pace of 35% CAGR over the last five years. With the right regulatory framework, SOGI believes the industry could grow five to sixfold in the near future.

SOGI stresses that a supportive tax policy is crucial for the continued expansion and success of the domestic online gaming sector, which has significant potential for contributing to the Indian economy.

[With PTI inputs]

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