Disappointing the gaming industry, the August 2, GST Council meeting upheld the decision to impose 28 percent GST on online gaming. GST would be charged on full face value, Finance Minister Nirmala Sitharaman confirmed.
In a press conference post the meeting, Sitharaman said a review of the same would be done after six months, which is likely to begin on October 1, 2023.
While stakeholders had limited expectations of a tax rate change, they remained hopeful for possible revisions in the valuation methodology.
“If the tax is the platform fee, it protects the interests of the entire online gaming ecosystem, consisting of around 850 Indian registered companies,” said a representative from a central gaming associations body before the outcome of the meeting was announced. As per the association, this methodology would have allowed the government to achieve its objective of increased revenue while also ensuring the sustainability of the majority of gaming businesses.
Stakeholders had submitted their representations to the government, requesting consideration of the platform fee-based valuation or the net deposit method, which would ensure fair taxation and prevent multiple taxations on the same amount.
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