The centre’s GST collection in the first six months after the imposition of the 28% GST regime stood at INR 6,909 Cr
The number is 412% more than the INR 1,349 Cr taxes collected in the six months prior to the imposition of the 28% GST Tax regime
The 28% GST regime on the online gaming industry came into effect on October 1 and entails a levy of a 28% tax on full face value of bets for real money gaming
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The goods and services tax (GST) collection from India’s online gaming industry surged 412% to INR 6,909 Cr in the first six months after the imposition of the 28% GST regime compared to the preceding six months, finance minister (FM) Nirmala Sitharaman said.
Addressing media after the 54th meeting of the GST Council, the FM said that GST collected from online gaming zoomed 5X during October 2023 and March 2024 period from INR 1,349 Cr in April-September period of 2023.
“We had taken this decision (new GST regime) on casinos, online gaming and horse racing… at that time we said that we will come up with a status report six months later. That status was presented to the Council (today),” Sitharaman said.
The 28% GST regime on the aforementioned industries came into effect on October 1 last year. As per the finance ministry’s notification, online gaming, horse racing and casinos were to be treated as “actionable claims” under the GST Act, similar to lottery, gambling and betting.
This entailed a levy of a 28% tax on full face value of bets for real money gaming. This tax is levied regardless of a game’s skill-based or chance-based nature.
Needless to say, the tax imposition caused a turmoil in the country’s real money gaming industry. While the likes of MPL, Hike and Spartan Poker laid off employees following the imposition of the new GST regime, Fantok and Quizy shut operations.
The new regime also hit the revenues of online gaming startups. As per a report released by EY and US-India Strategic Partnership Forum (USISPF) in June this year, more than 50% online gaming companies in India witnessed stagnant or declining revenues after the new regime came into effect.
Meanwhile, the Centre has been bullish on boosting India’s gaming capabilities. During his Independence Day speech, Prime Minister Narendra Modi called for making India the leading nation in the gaming industry.
“India has seen a boom in the development of its gaming market. However, I want the country’s youth to lead the gaming industry not just in playing but also in producing games,” he said.
Pertinent to note that the real money gaming segment contributes a sizeable chunk to India’s gaming industry. It boasts unicorns like Dream11, Game24X7, and MPL.
The India real money gaming space has around 100 Mn online gamers daily, including 90 Mn paying to play users, according to a Grant Thornton report. It was the biggest contributor to the broader gaming space in India, accounting for 83-84% of the overall revenue in FY22, the report said.
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