online gaming gst – storyboard18

Game over for profits? Industry unplugs concerns over GST

In addition to the basic rate of 30 percent, a health and education cess at the rate of 4 percent of the amount of tax is levied. Thus the effective tax rate on lottery winnings comes up to 31.2 percent. (Image sourced via Unsplash)

With the GST casting a shadow, the online gaming industry faces a tough choice: adapt and evolve their business models, or face a potential game over.

India’s booming online gaming industry faces challenges in transition to 28 percent GST bracket

Moving on from taxes and revenues, the report also said that India’s online gamers are expected to grow at a CAGR of 5 percent and reach 53.8 crore by FY28. (Representational image via Unsplash)

While the government’s efforts to regulate and tax the sector are understandable from a revenue generation and user protection standpoint, it’s crucial to ensure that these measures do not stifle the industry’s potential.

The silver lining of 28 percent GST on gaming: crackdown on offshore betting firms

The illegal offshore betting industry will continue to grow at 20% at the least, leading to a tax loss figure of Rs 6,72,205 crore by 2026.

The government has mandated these entities to officially register within the country, ensuring transparency and adherence to the higher GST levy.

Gaming influencers – How would 28 percent GST affect marketing spends on influencers?

As per Rohit Agarwal,founder and chief executive officer, AlphaZegus, in the influencer space, the imposition of 28 percent GST is less of a concern than recession, which is a greater concern. (Representative Image: AronPW via Unsplash)

Starting October 1, a 28 percent GST will be imposed on the face value of both games of skill and games of chance. Storyboard18 connected with an influencer and industry experts to understand the impact of the levy on brands’ marketing spends on influencers and therefore, the influencer economy.

GST Council decision on online gaming: Industry voices concerns and hopes for future review

The Supreme Court recently stayed the Karnataka High Court's judgment that had quashed the GST department's show-cause notice to Gameskraft in May 2023. (Representative image by Michał Parzuchowski via Unsplash)

While re-strategising business models might be an option for the larger players, for the smaller online gaming enterprises, the weight of taxation could prove to be insurmountable as per stakeholders.