Key Points
The decision of the GST Council to impose 28% GST on online games has been criticized by the gaming industry, as it will discourage legal gaming and provide opportunities for illegal offshore operators..
The gaming industry has argued that the tax should have been levied in a way that makes legal operations more viable, thereby promoting the growth of the industry and discouraging illegal operators..
The decision of the Goods and Services Tax (GST) Council to levy 28% GST on online games has kicked up a big storm..
The high tax on online gaming is like just any sin-good tax that has the twin purpose of raking in more revenue for the government and also discouraging the untrammelled growth of an industry which can have negative social implications, or at least an industry the government should not be seen promoting..
Imposing GST on CEA (contest entry amount) will render the legitimate online gaming industry unviable, effectively driving consumers towards offshore and illegal platforms that pay no taxes, resulting in loss of taxes and outflow of foreign exchange..
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