A group of players from the skill gaming industry on Friday urged the government to reconsider the GST Council’s recent recommendation to impose 28 per cent tax on the full amount of money placed on online gaming platforms, saying the decision “will have significant adverse effects on our community”.
The letter addressed to the Finance Minister and Prime Minister said, “The purpose of this letter is to express our deep concerns regarding the recent recommendation made by the GST Council to impose a 28 per cent tax on the full amount of the money placed on online gaming platforms. We have repeatedly asked our community and also conducted surveys, the staggering result was 9,500 gamers say they will stop playing online games in India.”
The letter has around 60 signatories ,including Moin Ejaz, Medalist in the Commonwealth Esports Championships; Anant Dwiwedi, Esports Gamer; Jaideep S, Poker; Arjun Gulati (Esports), Deep Patel, Poker Professional; and Hemant, a Chess GrandMaster.
“India boasts a staggering 421 million active online gaming users, and our concerns and rights were not adequately considered when determining the 28 per cent tax rate, despite multiple representations that sought a more balanced and equitable taxation framework for this sector,” they said in the letter. businessline has seen the letter.
They said the decision would increase the entry cost for the gamers to Rs 28 per 100, compared to the previous rate of 1.8, rendering online gaming financially burdensome and entirely unattractive as a source of entertainment or livelihood.
The Internet and Mobile Association of India (IAMAI) said the new tax will put Indian companies at a disadvantage in the global online gaming market, as online gaming is distinct from gambling and betting. Hence, taxing India’s legitimate online gaming industry with gambling activities will not only dent the burgeoning online gaming sector, but will also threaten the entire $20-billion Indian online gaming sector.
Meanwhile, Rajeev Chandrasekhar, Minister of State for Electronics and IT has said that “Online gaming is an important segment, but wagering and games of chance have increased cases of user-harm and money laundering. The GST Council’s decision to levy taxes on online gaming is a well-thought-out preliminary measure. After putting a regulatory framework in place, MeitY will seek consideration separately for games of skills and that for harmful games that involve wagering.”