Tax Woes Halt Gaming Industry Growth In India

ENA Sectors 2024-01-18 16:21:37 New Delhi, Jan 18 (KNN) In recent years, India's online gaming industry has surged, becoming the second-largest globally in terms of user base, driven by factors such as widespread smartphone adoption and increased internet connectivity. In a significant move in August 2023, the GST Council altered the tax structure for online gaming companies, shifting from an 18 per cent tax on gross gaming revenue to a 28 per cent tax on the full-face value of deposits for Real-Money Gaming (RMG) platforms. The repercussions were swift, leading to layoffs and a sudden halt in investments. Despite a compound annual growth rate (CAGR) of 28 per cent over the last three years, reaching Rs 16,428 crore in FY23, the sector faces a severe existential crisis. The GST Council, aiming to enhance tax collection, decided to impose a 28 per cent tax on every deposit, potentially yielding Rs 75,000 crores in the next five years. However, industry stakeholders argue that enforcing retrospective taxes may derail the sector's growth and jeopardize the government's intent. Despite these challenges, the industry has shown resilience, with companies absorbing the GST impact to retain users and sustain operations. As the sector remains in limbo, facing legal challenges in the Supreme Court, there is a pressing need for the GST Council to reconsider its stance on retrospective taxation. Striking a balance between industry growth and tax revenues is crucial for sustaining the vibrant online gaming sector in India. (KNN Bureau) 36337 https://knnindia.co.in/news/newsdetails/sectors/tax-woes-halt-gaming-industry-growth-in-india 2024-01-18 16:21:37 knnindia.co.in Tax Woes Halt Gaming Industry Growth In India