The tax revenue from the online gaming industry has the potential to touch Rs 10, 000 crore, according to Revenue Secretary Sanjay Malhotra. In conversation with CNBC TV-18, Malhotra shares that the industry has brought in about Rs. 1,700 crore in revenue to the department in FY 22-23.
According to Malhotra, if the Supreme Court rules in their favor, this Rs. 1,700 crore figure could easily increase by 5 to 10 times. In other words, Malhotra expects the tax revenue from the gaming industry to be in the ballpark of Rs. 10,000 crore.
Recently, the GST Council proposed a 28 percent tax, the highest, on online gaming. This proposal did not go down well with founders, competitive players, and streamers alike. Last year, the gaming industry generated Rs. 1,700 crore in revenue, a significant amount for any industry.
This tax proposal has already been presented twice but did not reach any consensus. Generally, lower taxation is considered an incentive to promote an industry as it brings down costs and encourages new talent. However, the government argues that it cannot promote casinos and online games more than essential goods. Thus, as a zero-sum choice, the high tax is justified. While the industry is completely opposed to this new taxation policy, the final decision now rests with the Supreme Court, and the ruling will have to be accepted by either party nevertheless.
The gaming industry has immense potential for growth, especially in a country like India. Not everyone needs a PC or a gaming console to play competitively. With the introduction of competition-level games available on smartphones, access has become a whole lot easier, making the gaming industry more versatile and accessible.
There are multiple revenue streams in the gaming industry, including manufacturing companies, game development companies, distribution players, online gaming platforms, competitive players, streamers, and many more. Gaming is a valuable market that will only continue to grow.