Online gaming players have expressed disappointment with the decision of the GST Council to levy a 28 per cent tax on online games involving real money. (REUTERS)

Minister of State for IT and Communications to Consider GST Council’s Online Gaming Regulatory Framework

Union minister Rajeev Chandrasekhar has stated that the government might approach the GST Council to take into account the details of the new regulatory framework for the online gaming industry, as concerns have been raised regarding the imposition of a 28% GST.

The minister also mentioned that it took the council three years to reach a decision on online gambling.

Online game players have expressed their disappointment with the Goods and Services Tax Council’s decision to levy a 28 percent tax on real money online games.

The Electronics and IT Minister said during the CNN-News 18 Townhall program that the GST Council is not the Government of India but is really a federal body representing state governments and the Centre.

“We also have to recognize that the creation of the regulatory framework for online gaming only started in January 2023. We are only in the early stages of creating a predictable, sustainable framework for permitted online gaming. So we will do that and come back to the GST Council and perhaps ask them to consider the facts of the new regulatory framework,” Chandrasekhar said.

GST is levied by the government based on the recommendations of the GST Council. Online gaming players have shared that levying 28 percent GST on gross gaming revenue (GGR) or platform fee will result in a tax hike of around 1,000 percent for the industry and cause irreversible damage to the $2.5 billion investment in India’s online gaming startup ecosystem.

A group of 127 online gamers, including All India Gaming Federation, WnZo, E-Gaming Federation, Games 24X7, etc., have said in an open letter that they have created more than 1,000 direct jobs so far with an expectation of creating more than 5,000 direct and indirect jobs in the industry by 2025.

However, the industry has to contemplate massive redundancies following the GST valuation decision, which will have a direct impact on our youth and massive engineering talent pool.