The online gaming industry is calling on the government to reassess its 28% GST policy

India’s online gaming industry, worth more than $3.5 billion, on Monday urged the government to reconsider imposing a 28% GST on “competition entry amount” to protect the domestic industry.

Online gaming institute Skill Online says the increased tax rate is stifling local businesses and hindering the industry’s ability to significantly expand.

“The switch from 18% of gross gaming revenues to CEA in October last year is not only a financial burden on legal domestic platforms, but also an unintended strengthening of illegal offshore betting and gambling activities,” said SOGI founder Amrit Kiran Singh.

“There is a need to reassess GST policy to curb the unintended consequences of supporting illegal gambling and support the growth of the domestic online gaming industry,” he said.

Singh highlighted concerns that the high tax rate is driving Indian companies out of the market while foreign companies, especially those from China where no such tax exists, are gaining a competitive advantage.

“The government has agreed to review the GST rates on online gaming after the elections, so we want it to be done after a full survey and not by looking at the increase in revenue that has occurred as a result of this change,” Singh said.

He urged the government to conduct this review with a full understanding of the Indian and global online gaming landscape.

Singh also asked the government to consider the tax models of other countries such as the US, UK and China.

SOGI is also working with the University of Oxford to explore global regulations and tax structures for online gaming.

SOGI highlights the industry’s potential for job creation and economic growth. The sector currently employs over 2 lakh people and is growing at a rapid rate of 35% CAGR over the last five years.

SOGI is confident that with the right regulatory framework in place, the industry will have the potential to grow fivefold or even sixfold in the near future.

(With text entries from PTI)