May go back to GST council on online gaming regulatory framework: MoS IT

Amid the online gaming industry raising concerns over the levy of 28 per cent GST, Union minister Rajeev Chandrasekhar on Monday said the government may request the GST Council to consider the facts of new regulatory framework for the industry.

The minister also mentioned that it took three years for the Council to reach a decision on online gaming.

Online gaming players have expressed disappointment with the decision of the Goods and Services Tax Council to levy a 28 per cent tax on online games involving real money.

The Minister of State for Electronics and IT during a CNN-News 18 Townhall programme said that the GST Council is not the government of India but it is truly a federal organisation representing state governments and the centre.

"We have to also recognize that the process of creating a regulatory framework for online gaming only started in January 2023. We are only in the early stages of creating a predictable, sustainable permissible online gaming framework. So, we will do that and we will go back to the GST Council and maybe request their consideration on the facts of the new regulatory framework," Chandrasekhar said.

Government levies GST based on recommendations of the GST Council. Online gaming players have shared that levying 28 per cent GST on Gross Gaming Revenue (GGR) or the platform fee results in around 1,000 per cent increase in tax on the industry and cause irreversible damage to the USD 2.5 billion investments in the Indian online gaming startup ecosystem.

A group of 127 online gaming players, including All India Gaming Federation, WnZo, E-Gaming Federation, Games 24X7 etc in an open letter has said that over 1 lakh direct jobs have been created by them till date with the expectation that over 5 lakh direct and indirect jobs would be created by the sector by 2025.

However, the industry will have to consider massive layoffs in the aftermath of the decision on GST valuation which will have a direct impact on our youth and massive engineering talent.