‘Request their consideration’: IT Minister’s claim over 28% GST on online gaming

Union Minister Rajeev Chandrasekhar has said that the central government may request the GST Council to consider the facts of the new regulatory framework of the online gaming industry amid the raising concerns over the levy of 28 per cent GST. He mentioned that it took three years for the Council to reach this decision. […]

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Alina Khan
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Union Minister Rajeev Chandrasekhar has said that the central government may request the GST Council to consider the facts of the new regulatory framework of the online gaming industry amid the raising concerns over the levy of 28 per cent GST. He mentioned that it took three years for the Council to reach this decision.

Union Minister Rajeev Chandrasekhar on 28% GST on online gaming

Since the new regulation is imposed by the centre, online gaming players have expressed major disappointment with the decision of the Goods and Services Tax Council to levy a 28 per cent tax on online games involving real money. In an interview, the minister said that the GST Council is not the government of India but it is truly a federal organisation representing state governments and the centre.

Chandrasekhar said, “We have to also recognize that the process of creating a regulatory framework for online gaming only started in January 2023. We are only in the early stages of creating a predictable, sustainable permissible online gaming framework. So, we will do that and we will go back to the GST Council and maybe request their consideration on the facts of the new regulatory framework.”

Centre’s new GST rule

The Centre levies GST based on the recommendations of the GST Council. Online gaming players have shared that levying 28 per cent GST on Gross Gaming Revenue (GGR) or the platform fee results in around a 1,000 per cent increase in tax on the industry and cause irreversible damage to the USD 2.5 billion investments in the Indian online gaming startup ecosystem.

In an open letter by a group of 127 online gaming players, including All India Gaming Federation, WnZo, E0Gaming Federation, Games 24X7, etc., said that more than 1 lakh direct jobs have been created by them to date with the expectation that over 5 lakh direct and indirect jobs would be created by the sector by 2025.

Amid this, the industry will have to consider massive lay-offs in the aftermath of the decision on GST valuation which will have a direct impact on our youth and engineering talent.