The 28% taxation rate has been anticipated by gaming companies, as the Group of Ministers (GoM) had previously agreed to propose taxes on these activities. However, there was no consensus on online gaming, as Goa had proposed a tax rate of 18% on platform fees. It is important to note that 28% is the highest tier of GST.
Additionally, the GST council has also determined that there should be no distinction between games of skill and games of chance. The implementation date for the 28% GST levy on online gaming will be announced after amendments to the GST law are made.
This decision poses challenges for gaming companies who have opposed the 28% GST rate on online games. The FICCI Gaming Committee, representing some of the largest online gaming companies, has urged the Central Board of Indirect Taxes & Customs (CBIC) not to increase the GST rate for the sector to 28%. They argue that such a high taxation rate would be extremely detrimental to the survival of the online gaming industry.
It is important to make sure that gaming companies are aware of these developments and consider their potential impact on their operations and sustainability.
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