The Online Skill-based Gaming Sector is expressing its dissatisfaction with the decision made by the GST Council to impose a 28% GST on online gaming. Broadband India Forum (BIF), an independent policy forum and knowledge-based think tank, believes that this decision is harsh and detrimental to the industry’s long-term potential in generating revenue for the national exchequer. BIF argues that this decision will hinder the demand for 5G, impede the increase in broadband traffic and penetration, and fail to instill a renewed sense of responsibility and accountability among gaming intermediaries.
BIF sees this decision as a major setback for the flourishing online skill-based gaming sector. Not only will it negatively impact foreign direct investments (FDI) and advertising revenues, but it will also hinder the growth of the sector in the critical 5G era. BIF warns that the high tax rate will encourage the growth of black market operators, posing a serious security threat to national security.
In a statement, BIF emphasizes the importance of innovation and investment in the online skill-based gaming industry, which has a valuation of $20 billion, generates $2.5 billion in revenue, and creates significant job opportunities. BIF urges the government to adopt a cross-sectoral approach to support the growth of this industry along with other sectors.
Although the finance minister has announced a review of the GST in 6 months, BIF cautions that the majority of the industry consists of small businesses, and many entrepreneurs may be forced to exit the sector due to the high tax burden. This decision may also discourage foreign investments in the sector and significantly reduce the advertising budget, impacting the media and entertainment industries.
BIF earnestly requests the authorities to reconsider their decision in order to maintain India’s leadership position in the online skill-based gaming industry as envisioned by the Prime Minister’s vision of making the country a global powerhouse in audio visual gaming and comics (AVGC).
TV Ramachandran, President of BIF, expresses concern that the proposed tax rate will deter future investments and lead to the departure of many entrepreneurs from the sector. BIF emphasizes that the online skill-based gaming industry is a major driver of foreign and domestic investments and plays a crucial role in boosting the economy.
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