iWorld
Proposed 28% GST on online gaming could lead to decline in active users: ASSOCHAM & EY Report
MUMBAI: According to a joint report by Assocham and EY, titled ‘GST on Online Skill-Based Gaming’, GST Council’s Group of Ministers (GoMs) are examining the GST on online gaming. One of the considerations by GoM is recommending a levy of 28 percent Goods and Services Tax (GST) on the complete contest entry amount including the prize pool, which can have an adverse effect on the industry. Levy of GST on the contest entry amount would increase the tax burden on the nascent industry by 10 to 20 times. The industry currently pays GST at the rate of 18 percent on the platform fee or the Gross Gaming Revenue (GGR) earned directly by the gaming operators.
The report estimates that the industry contributes more than Rs 2,200 crore of GST in 2022 and the winnings from online games are subject to income tax, which also contribute a significant amount to the exchequer.
The report has also listed out the unique features that set online skill-based gaming apart from games of chance. It entails technology solutions that are provided by operators to enable user-interface as well as build a gaming ecosystem and act as facilitators. The fee charged is a fixed consideration and is not dependent on outcome. Its success is also dependent on the superior knowledge of the user and engagement with the game, making skill the predominant element.
The report notes that the proposed levy of tax at 28 percent from 18 percent, along with 30 percent income tax on winnings, takes the rate of taxation on online gaming between 45-50 percent. With the GST tax proposal leading to higher taxation, it could lead to a decline in active users and discourage domestic gaming industries.
According to recent industry estimates, there are 500 gaming companies in the country, which have provided employment to thousands of people and have also seen an inflow of Foreign Direct Investment (FDI) worth $2.7 billion. However, they are likely to be impacted by high taxations and would open doors for offshore operators. The report states: “This sector could also help in facilitating the government’s vision for the Animation, Visual Effects, Gaming and Comic (AVGC) sector and encourage the domestic players rather than driving users to foreign companies/ offshore platforms; thereby enhancing government’s revenue collection.”
Assocham secretary general Deepak Sood said, “The Assocham-EY report on the impact of GST on online skill-based gaming is quite revelatory. The growth of the online gaming industry comes as no surprise as it’s largely youth-driven and has been fuelled by the increasing usage of internet and smartphones, especially during the pandemic. India is expected to become one of the world’s leading markets in the gaming industry, which also bodes well in terms of a robust digital economy GDP as well as an employment-generator. Therefore, any step that the government takes to strengthen the sector through an optimal tax structure is welcome.”
The report asserts that the right tax structure can have a positive impact on the industry and drive tax revenues. “The crystallisation of the GST valuation mechanism could be a catalyst in enabling ease of doing business and spur growth of this rising sector,” it concludes.
Gaming
Skyesports, GodLike Esports sign MoU with Maharashtra Cyber
Partnership promotes esports growth and cyber hygiene across the state.
MUMBAI: Skyesports and Godlike Esports just teamed up with Maharashtra Cyber because when you’re levelling up gaming in India, even the police want to join the squad. Skyesports, India’s leading esports and gaming IP builder, and premier organisation Godlike Esports have signed a Memorandum of Understanding (MoU) with Maharashtra Cyber, the state’s nodal cyber security office, to foster esports development while embedding cyber hygiene and online safety practices across Maharashtra.
The agreement, formalised during a closed-door meeting in Mumbai, aligns with the state’s push to grow the orange economy and positions Maharashtra as a rising hub for digital gaming and esports. It emphasises responsible participation, cyber awareness and safe digital conduct among gamers and youth.
Under the MoU, Skyesports will organise and promote tournaments and community initiatives infused with cyber hygiene messaging. GodLike Esports will contribute through professional player mentorship, community engagement and awareness programmes encouraging positive behaviour. Maharashtra Cyber will support safety campaigns and promote responsible online practices within the ecosystem.
Skyesports founder and CEO Shiva Nandy said, “The growth of esports requires strong collaboration between the industry and government stakeholders. This MoU with Maharashtra Cyber represents an important step toward strengthening Maharashtra’s esports ecosystem through responsible gaming initiatives and grassroots engagement.”
Maharashtra Cyber additional director general of police Yashasvi Yadav added, “As esports continues to grow rapidly among young audiences, it is equally important to promote safe and responsible digital practices within the gaming ecosystem.”
Godlike Esports, founder Chetan “Kronten” Chandgude noted, “The true growth of esports in India lies in strengthening its roots at the grassroots level. This collaboration will support the state’s vision of building a strong and sustainable esports ecosystem.”
Eyrie Entertainment will cover and amplify Maharashtra Cyber’s cyber awareness activities across events and campaigns.
The partnership reflects a forward-looking effort to nurture Maharashtra’s esports talent pipeline while ensuring rapid growth is matched by strong digital safety guardrails. Further initiatives, tournaments and outreach programmes are expected to be announced soon.
In a state where gaming is levelling up faster than broadband speeds, this MoU isn’t just paperwork, it’s a power-up that turns players into safer, smarter pros, one secure headshot at a time.
