The Internet and Mobile Association of India (IAMAI) on Monday appealed to the Centre and the GST Council to maintain status quo on GST rates on online games of skill to let the industry survive.

The existing rate of GST on this sector of online skill gaming industry is 18 percent on the Gross Gaming Revenue (GGR) and zero percent on Contest Entry Fee  which is legal, fair and in line with international taxation standards for this sector. The IAMAI dy said that the imposition of further 28 percent GST on GGR would increase the incidence of taxation to about 55 percent, which is patently unfair for an industry which is considered to be a legitimate trade - profession and not a game of chance. "It would make it unviable for the vast majority of consumers, negatively impacting net GST collection from the sector," it said in a statement.

Further, if 28 percent GST is imposed on the CEF, the incidence of GST shoots up nearly 10 times (1,100 percent). "Thus, it is very likely that the industry and GST revenue, thereof, will cease to exist," said the industry body. Online games have paid a cumulative Rs 6,000 crore GST since the last 4 years and are likely to pay Rs16,000 cr between 2022-2025. It is estimated that a major portion of this comes from online games of skill, given the transparent, measurable, and non-cash mechanism that this sector follows.

As per IAMAI, the impact of any changes in the current incidence of GST would mean that many of the offline service providers will go underground leading to further revenue leakages on one hand. "On the other hand, for the online games of skill, it would tantamount to killing the proverbial goose that lays golden eggs," it said.

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