Will request GST Council to reconsider 28% tax on online gaming: MoS Rajeev Chandrasekhar

Amid backlash from the online gaming industry over the imposition of 28% GST, Minister of State for Electronics & Information Technology (MeitY) Rajeev Chandrasekhar has said he will “request the GST council for consideration on the new regulatory framework”.

The GST Council on July 11 decided to impose a 28% GST on full face value for online gaming companies.

“We will go back to the GST Council and request their consideration on the facts of the new regulatory framework,” Chandrasekhar said while speaking at a CNN-News18 event.

Also read: Online gaming companies say only illegal platforms will gain from 28% GST

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 this would only benefit illegal platforms.

Also read: Game over: Indian gaming companies fear thousands of job cuts after GST increase

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In an open letter, the companies noted that the online skill gaming sector in India has a $20-billion enterprise valuation and generates annual revenue of $2.5 billion. It is expected to grow at a 30% compounded annual growth rate to reach annual revenue of $5 billion by 2025, they added.Also read: Online gaming companies seek more clarity on GST

“The proposal to charge GST on full deposit value will reverse the growth trajectory of the industry. This would potentially have devastating implications (including 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.

ET on Saturday reported that online gaming companies were in a huddle over their next steps, and were expected to seek clarifications from the government on applicability of the GST.

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