The Indian online gaming industry, currently valued at $3.5 billion, advised the government to reconsider its decision of a 28% Goods and Service Tax (GST) on the Contest Entry Amount (CEA) to support and protect the gaming industry.
The Skill Online Games Institute (SOGI) argues that the current high tax rate is restricting local businesses and hindering the industry’s potential growth and unintentionally supporting illegal Offshore platforms.
The Founder and President of SOGI, Amrit Kiran Singh, commented “The shift from 18% on gross gaming revenue to CEA in October last is not just a financial burden on legitimate local business but also unintentionally supported illegal offshore betting and gambling activities.”
He further said, “The government had agreed to review the GST rates on online gaming post-election and so we want it to be done after complete study, rather than looking into revenue spurt it has given due to the shift.”
He advised the government to do a complete study and understanding of the Indian and global online gaming industry rather than looking at the revenue it has generated after the GST imposition.
Singh suggested the government to imply taxation models of other countries like the US, UK, and China. SOGI is working with the University of Oxford to research global regulations and tax frameworks for online gaming.
SOGI emphasizes the industry’s potential for job creation and economic growth, pointing out that the sector currently employs over 2 Lakh individuals and has experienced a 35 percent CAGR over the past five years. The company believes that, with the right regulatory framework, the gaming industry will expand five to six times in the near future.
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