NEW DELHI: In a request addressed to Finance Minister Nirmala Sitharaman, the Online Gamers' Association sought a reduction in the Goods and Services Tax (GST) on online gaming, currently set at 28 percent. They urged that such high taxation might foster the growth of illegal gaming firms. The association, known as 'Indian Gamers United,' represented gamers from Tier II and Tier III cities, emphasizing that excessive taxation could push them toward offshore platforms where no tax is imposed but may expose them to greater risks.

Their statement highlighted the importance of distinguishing between games of chance, such as gambling, and games of skill, like gaming. They firmly asserted that gaming is a skill-based activity that should not be categorized with games of luck. Consequently, they called for a reconsideration of taxation to make it more favorable for the gaming community.

The rise of online games offering monetary rewards has created a segment in which young individuals utilize their gaming skills to earn income, effectively becoming part of the gig economy.

The association stressed that a 28 percent GST rate on online games would have a detrimental impact on this thriving industry.

Recently, in its 50th meeting, the GST Council, headed by Finance Minister Nirmala Sitharaman, decided to impose a maximum 28 percent tax on the full face value of bets in online gaming, casinos, and horse racing. This decision received criticism from the online gaming industry, prompting Minister of State for Electronics and IT, Rajeev Chandrasekhar, to call for reconsideration.

While revenue secretary Sanjay Malhotra stated that the decision to impose the 28 percent tax was based on the recommendation of the Group of Ministers (GoM), Minister Chandrasekhar expressed hope in developing a sustainable and permissible online gaming framework. Once established, he planned to approach the GST Council again for reconsideration based on the new regulatory guidelines.

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