eGaming players remain bullish despite GST issues, demand more clarity on regulations | Mint
Active Stocks
Fri Feb 23 2024 15:58:13
  1. Tata Steel share price
  2. 145.50 -0.24%
  1. State Bank Of India share price
  2. 759.40 -0.86%
  1. HDFC Bank share price
  2. 1,420.90 0.08%
  1. NTPC share price
  2. 337.70 -0.54%
  1. ITC share price
  2. 411.60 -0.65%
Business News/ Industry / eGaming players remain bullish despite GST issues, demand more clarity on regulations
BackBack

eGaming players remain bullish despite GST issues, demand more clarity on regulations

The increased GST rate on online real-money gaming industry has impacted the sector adversely, causing some of the gaming platforms to announce closure of business and layoffs

The notices implicated GST dues of ₹1.12 trillion to eGaming firms in India. (HP India / HT Photo) (HT_PRINT)Premium
The notices implicated GST dues of 1.12 trillion to eGaming firms in India. (HP India / HT Photo) (HT_PRINT)

Online gaming companies have received 71 show-cause notices relating to Goods and Services Tax (GST) in FY23 and FY24 up to October, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha on Tuesday, December 5. The update from the minister has received mixed responses from the eGaming sector.

The minister said in a written response that the notices implicated GST dues of 1.12 trillion.

Speaking on the challenges faced by the eGaming sector, Roland Landers, CEO of the All India Gaming Federation (AIGF), said, “With the introduction of a new GST regime, and its impact on the industry, and the possibility of consolidation among industry actors, it is expected that the industry will be operating in considerably more difficult circumstances as it enters the new year."

"The increased GST rate on online money gaming industry (28% on the entire deposit amount, from previous industry stand of levying GST @ 18%, only on the platform fees) has impacted the industry adversely, causing some of the money gaming platforms to announce closure of business itself and in some cases, layoffs. The GST Council had decided to review these amendments after six months, evaluating the impact of these amendments on the industry," said Payal Thaker, Partner, Indirect Tax, BDO India.

By 2025, India is projected to hold around 5 per cent (US$ 40 billion) of the global market with a yearly growth rate of between 25 and 30 per cent. Additionally, the sector is expected to create over 1,60,000 new jobs. The gaming sector is anticipated to grow by 30 per cent annually as one of the fastest-growing segments in media and entertainment by 2025, according to the India Brand Equity Foundation (IBEF).

Will growth momentum continue in 2024?

"We expect that as the dust settles and the Industry has time to recalibrate to the new circumstances, they will be able to slowly but surely edge towards their earlier growth rates," Landers added.

The eGaming sector remained hopeful, expecting that there will be a review of the implementation of the new GST regime in 2024 and that suitable changes will be introduced to assure the stable growth of this homegrown industry. "We are also hopeful that the IT Rules for online games will be implemented and the notification of self-regulatory organisations for the industry will contribute to regulatory clarity and growth that balances innovation and user safety," said the All India Gaming Federation CEO.

Anil Joshi, managing partner of Unicorn India Ventures, also demanded more clarity on the regulations for the eGaming sector. "The industry is working on two things: first to deal with excess GST demand and secondly, bringing some clarity on games of skill and game of chance," said Joshi.

Earlier, Mint reported that the CEO of the E-Gaming Federation (EGF), Anuraag Saxena, said he was optimistic about ongoing discussions between the federation and government stakeholders looking to address these concerns. Saxena said in an interview that the industry was united in presenting a compelling business case to the government, highlighting the sector's positive social impact.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 06 Dec 2023, 03:48 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App