Credits to Rummy Circle. Online Games are in grave danger.

Is There a 28% GST on Online Gaming Now?

Newsroom May 17, 2022
From May 18, GST on the online gaming platforms is going to increase from 18% to 28%.
A lot of organisations feel that this is the D-day for the industry, as a lot of platforms would not be able to cope with the blow.
On the other hand, many feel that this is going to contribute to society in general and give the industry some recognition.

If you do follow the Indian gaming platform properly, then you must be aware of the online gaming sector where you can put your money and then play. Depending on whether you win, you get the chance to win more money or lose some. Many people would consider this something quite close to gambling, whereas others would consider it just a few online games. Yet, India, being a predominantly conservative country, has put online gaming under the category of gambling, and has decided to levy a heavy GST on it.

What is the Problem with Online Gaming?

The first thing that you might want to ask is, what is the problem with online gaming? Basically, according to the Constitution, gambling is faced with lots of rules and regulations to keep people away from falling prey to such vices. However, online gaming falls into a grey area where people know that it is gambling, but it is not exactly like gambling. Rummy Online, Dream 11, all of these games are openly sponsored by the big celebrities in the country. But there have been several discussions regarding whether online gaming should be banned or not.

Credits to Entrackr. Dream 11 is an online gaming platform endorsed by a lot of high profile celebrities too. 

However, the ministers themselves are quite at a loss, and it has been proved that online gaming is not Gaming on Luck, but Gaming on Skills. This makes it completely legal and acceptable in the eyes of the government. Still, it seems the government is not satisfied with the middle ground that has been established.

How is the GST going to be implemented?

At first, there was a GST of 18% on the online gaming platforms, and now it will be increased to 28%. However, things do not stop there. The GST Council and the GoM have decided to charge the GST, not on the gross gaming revenue but on the platform entry fees. This would pose a huge problem for the whole industry. Small scale online gaming platforms would struggle to survive if entry fees were reduced by 28%.

Credits to Business Today. GST for these platforms will rise from 18% to 28%.

There have been a lot of debates going around this topic right now. Many feel that it is wrong to put online gaming in the category of gambling and betting in sports like horse racing, etc. Online gaming is way different than anything else, and there should be different rules and regulations to carry on this trade. On the other hand, a lot of big online gaming platforms have supported the decision as they do want to contribute towards nation building. They are glad that the government has recognised the online gaming platform as a source from which they could contribute to the country’s overall revenue. They are also of the opinion that the big industries of the country, like cement, automobiles, etc., have to pay higher GSTs and revenues too. This can only be a good sign for the growth of their industry.

Yet, even they agree that the government should not charge the GST on the platform entry fees, but rather on the gross revenue that would come in. The GST tax is supposed to be implemented from May 18th.

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