The demands of the gaming sector were not discussed at the GST Council meeting

New Delhi, June 23 The Goods and Services Tax (GST) Board in its 53rd meeting has decided not to heed the demand of gaming companies to levy 28% GST on the Gross Gaming Revenue (GGR) earned by the industry, not from the full value of bets placed in online games.

The 28% GST on skill-based online gaming has triggered a cascade of consequences, including funding constraints, reduced growth trajectories, job losses and increased uncertainty across the sector, according to gaming companies.

Manish Mishra, partner at JSA Advocates and Solicitors, said the fact that GST on online gaming was not brought up in the discussions “could be a major disappointment for the sector which was expecting relief due to the high rate of taxation and retrospective demands.”

According to the latest report by Ernst & Young (EY) and the US-India Strategic Partnership Forum (USISPF), from October 2023, some companies from the gambling industry reported the complete withdrawal of investors from global brands already at the beginning of the new GST system.

Before the amendment, the cost of GST was 15.25%. revenues.

However, since October 1, 2023, the cost of GST has increased manifold – currently, GST consumes 50-100% of revenues for 33% of companies, and in the case of startups, it even exceeds total revenues.

“These start-ups must now be loss-making,” the report argued.

–IANS

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