Big decision of GST Council, 28 percent tax imposed on online gaming
In the 50th GST Council meeting, the Central Government has decided to impose 28 percent tax on online gaming, casinos and horse racing etc. In this meeting chaired by Finance Minister Nirmala Sitharaman, it has been decided to levy 28 percent tax on the full face value of the amount spent in online gaming, horse racing and casinos etc. Earlier in the meeting held in June 2022 also, the government has given premium GST to online gaming, racing etc. There was discussion on bringing it under the ambit of In the meeting held on Tuesday, the government again discussed these and took this big decision.
The GoM (Group of Ministers) has recommended in the 50th GST Council meeting that no exemption should be given to the expenses incurred in online gaming, racing and casinos etc. These activities should attract a GST of 28 per cent on the full-face value. However, the online gaming industry believes that this move by the government could have a negative impact on the gaming sector.
Negative impact on the online gaming sector
Online gaming is becoming a huge market. In the last few years, there has been a huge increase in the earnings through online gaming. Online games like PUBG Mobile, BGMI, Free Fire, Rummy Circle are becoming very popular. Players buy in-game items and currency to increase their ranking in the game, for which they are investing real money. This step of the government will generate revenue through the earnings through this sector, which can be used for the growth of the sector.
Industry experts believe that online gaming companies were already troubled by Google’s revenue sharing model. Now the tax imposed by the government can have a negative impact on the industry.
Reduced tax on electronics items
In other related news, the government has reduced GST on many electronic items at the end of last month. In particular, the tax on household items has been reduced from 31 percent to 12 and 8 percent. There has been a huge reduction in the tax on other household items including TV, fridge, washing machine. Users will now be able to buy these items cheaply.