Online gaming to attract investment after tax policy is finalised: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Tuesday said the GST Council will discuss the taxation policy for online gaming and expressed confidence that the sector will attract investment once finalized.

He was responding to a question from Korean gaming company Krafton about which games India plans to attract foreign investment in gaming companies.

The Minister said that the GST Council will hold ministerial-level discussions on various aspects of online gaming, including taxation and regulation.

The Goods and Services Tax Council is chaired by Sitharaman and consists of state finance ministers.

“When political certainty comes, taxation will become … clearer, it will attract investors,” Sitharaman said while addressing the Indian diaspora in Seoul.

Online gaming experienced a spurt during the Covid lockdown and the number of users in India increased significantly. According to a KPMG report, the online gaming sector would grow to Rs 29,000 crore by 2024-25 from Rs 13,600 crore in 2021.

The vexed issue of levying Goods and Services Tax (GST) on online gaming has been simmering for almost two years now, with many states moving to lower the threshold for skill-intensive online games. They are of the opinion that games of skill should not be treated in the same way as games of chance.

The GST Council is expected to take a final decision on taxation of online gaming in its next meeting, which is likely to be either this month or June.

Last month, the Ministry of Electronics and IT announced standards for the online gaming industry, which categorically prohibit all such betting and betting-related games.

The online gaming industry follows a self-regulatory model, initially notifying three Self-Regulatory Organizations (SROs) that approve games that can operate in the country under the rules.

In response to Krafton’s question, Sitharaman said on a lighter note that he watches Japanese and Korean memes and also anime.

“I would like them to come to India… The championship where the weaving of the story takes place, there is so much positivity in it… That is what we want for adults today,” he said. PTI DP JD CS The correspondent is in Seoul at the invitation of the Asian Development Bank (ADB).

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