Indian government announces that taxation of 28% on online games will start from October 1, 2023
In India, the online game market is booming, and it was reported that by 2022, online game revenue will reach about $ 2 billion (about 280 billion yen). Meanwhile, in July 2023, the Indian government decided to ``
Online Gaming: 28% GST To Be Implemented From Oct 1, To Be Reviewed After 6 Months
https://inc42.com/buzz/online-gaming-28-gst-to-be-implemented-from-oct-1-to-be-reviewed-after-6-months/
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In India, culture such as ' fantasy sports ' that bet real money on the theme of cricket, which is a national sport, is booming. However, it has been pointed out that there is growing concern that game apps may cause addiction or lead to economic loss.
In response to these concerns, in early 2023, the Indian government amended the IT Act to regulate online games offering gambling services. However, an online game development company in India claimed that it was a skill-based game, not gambling, and escaped regulation.
Therefore, in July 2023, the Indian government's Goods and Services Tax Council (GST) announced that it would impose a uniform tax of 28% on online games, casinos, and horse racing that use real money.
The Indian government decided to impose a tax of 28% on online games, shocking the industry - GIGAZINE
In response to the GST decision, some fantasy sports industry groups and game application development companies argued that ``the introduction of a tax rate of 28% could pose a serious challenge to the Indian game industry.'' I was asking for a review of
However, GST Finance Minister Nirmala Sitharaman reported, ``At the GST Council held on August 2, 2023, the government decided to impose a tax on online games from October 1.'' ``The decision may be reviewed after six months from the start of taxation,'' he said.
In addition, Mr. Sitharaman explained the details of taxation, ``28% taxation is applied according to the total amount deposited by the user to play online games using real money, and the amount bet is not taxed. ” reported.
At the stage of July when the introduction of the tax was announced, the All India Gaming Federation, an industry group representing players who are active in popular fantasy sports in India such as Mobile Premier League , Gameskraft, Paytm First Games, Zupee, Nazara, and Rush. CEO Roland Sanders criticized, ``Only anti-national illegal offshore gambling websites will benefit from this tax.''
However, the GST has announced that it will set up a special monitoring system to monitor offshore game developers and ensure that they collect taxes. Sanjay Malhotra, Secretary of Revenue, added: 'We will introduce specific provisions for registration of offshore gaming companies. If offshore gaming companies do not comply with the law, we will take measures such as blocking the site under the IT Act. will be enforced.”
In addition, in offshore games, payment of money in virtual currency such as NFT is also subject to this taxation.
The Fantasy Sports Federation of India (FIFS) and the E-Gaming Federation (EGF), the fantasy sports industry associations, welcomed the Indian government's introduction from October 1, saying, 'The new tax framework will be a very heavy burden for us. It is an opportunity to innovate and rebuild the foundations of the Indian gaming industry.'
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