28% GST on online gaming: Government unlikely to review decision
Online gaming firms are believed to have written to the finance ministry to reconsider the increase, expressing concerns that it would impact the sector and lead to job losses
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Even if the online gambling business is expecting for some relief, it is unlikely that the decision to apply a 28% goods and services tax (GST) on the entire value of the industry would be reviewed or reversed.
According to official sources, there will not be a GST Council review of the decision. "A review is not planned. After careful consideration and deliberation, the GST Council unanimously decided to make the decision, according to a person with knowledge of the situation.
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After the GST Act is amended in the Monsoon Session of Parliament, notification giving effect to this decision is likely to be issued.
Online gaming companies and gamers are believed to have written to the finance ministry asking them to reconsider the 28% GST due to their concerns that it will harm the industry's growth, result in job losses, and raise player expenses.
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"Charging a 28% tax on the entire face value is a very regrettable move since it will result in a taxation increase of around 1,000% and be disastrous for the industry. According to Malay Kumar Shukla, Secretary of the E-Gaming Federation, after the GST Council's decision, "a tax burden where taxes exceed revenues will not only make the online gaming industry unviable but will also boost black-market operators at the expense of legitimate tax-paying players, further undermining the industry's image and capacity to survive."
In addition, he had warned, there will be a significant impact on marquee investors who have made significant investments in this emerging area.
The Confederation of All India Traders (CAIT) urged Prime Minister Narendra Modi to intervene, reconsider, and reverse the GST Council's decision to impose GST on online gaming's full face value and group it with gambling operations on Monday.
"According to CAIT, this will also direct gamers to illegal offshore websites, lessening the internet's safety for digital nagriks," it said in a statement. "This is an aberration to the efforts being made by the Central Government to regulate and promote safe online gaming."
