Will approach GST Council on online gaming regulatory framework after it is in place: Rajeev Chandrasekhar
“After the nascent n evolving regulatory framework around the online gaming rules that define permissible online games develops – then we will communicate new framework to gst council amd rqst them to consider this new framework,” he tweeted on Tuesday, in his unique style.
Media outlets had earlier reported, quoting Chandrasekhar, that he would “request the GST council for consideration on the new regulatory framework”.
“We will go back to the GST Council and request their consideration on the facts of the new regulatory framework,” he had said while speaking at an event.
The clarification comes amid a backlash from online gaming companies and associations over the GST Council’s decision to impose 28% GST on the full face value for online gaming companies.
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The government had earlier dismissed the need for any consultations with the industry on the matter, saying it was a “unanimous” decision and that an early review was unlikely.
Revenue secretary Sanjay Malhotra had said 28% GST on the entire transaction value for online gaming had always been in effect, and that companies had been “interpreting” the rate as 18%. Tuesday’s announcement was only a clarification, he had said.
ET had earlier reported that around 130 online gaming companies and industry associations, including Mobile Premier League (MPL), Nazara Technologies, Gameskraft Technologies and Winzo Games, have appealed to the GST Council to reverse the decision, saying that it would only benefit illegal platforms.
“The proposal to charge GST on full deposit value will reverse the growth trajectory of the industry. This would potentially have devastating implications (including a shutdown of businesses) for MSMEs (micro, small and medium enterprises) and startups that may not have the capital reserves to withstand such a sharp tax increase,” the letter read.
Meanwhile, online gaming companies have been in a huddle over their next steps, and are expected to seek clarifications from the government on the applicability of the GST levy
Notably, the government is yet to notify self-regulatory organisations (SRO) under the new regulations for online gaming. The government has received at least three proposals for the formation of SROs; the deadline for the submission of proposals was July 6.
The government had earlier told the online gaming industry that three SROs would initially be notified by the centre.
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