GST Rate to be continued at 18 % for online gaming

17 May,2022

By Our Staff

 

The Internet and Mobile Association of India (IAMAI) in a statement issued on Monday urged the GST Council to continue maintaining the GST on online gaming at 18 percent. For real money games in particular the GST should continue to be levied on the Platform Fee only at the rate of 18 percent. Any increase in the GST rates in this sector will be detrimental to the overall wellbeing of the industry, seriously impacting the industry’s contribution to the nation’s economy through revenue generation, livelihood creation and foreign investments.

 

IAMAI notes with concern that there is an ongoing discussion to increase the GST taxation rate to 28 percent for the online gaming industry. There is also no clarity on whether this will apply only to real money games or casual games as well, given that the former being a sub-segment of online gaming. Further, it appears from the reports in the media that for real money games this may be applied to the entire Contest Fee.

 

IAMAI is of the opinion that any such increase in the GST rate is likely to turn businesses in the sector unviable, leading to complete shutdown, which in turn will result in loss of a large number of jobs and a loss of investor-confidence debilitating India’s online gaming industry, which is currently witnessing fast and exponential growth of 35 percent CAGR.

 

That apart increasing the GST rate will lead to an erosion of tax-base on the one hand, and encourage the spawning of grey markets on the other.

 

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