Budget 2024: Gaming, alcohol and tobacco firms hope for favourable tax treatment

The online gaming industry has been seeking 28 per cent GST on gross gaming revenue (GGR) instead of the total amount deposited by players.

It is said of Finance Ministers in general that what they give with one hand is taken back with the other. Revised tax slabs and benefits for the middle class are some of the expectations from the upcoming Budget. But there is also apprehension that the by government might ask the citizens for something in return: higher taxes on cigarettes coupled with no relief for the gaming sector.

While most eyes will be on the infrastructure, manufacturing and consumption-related updates, some experts are also looking to see what Finance Minister Nirmala Sitharaman’s first post election Budget may have in store for the liquor, tobacco and gaming sectors.

Industry wish list

Chatter on the Street is that excise duty or NCCD duty on cigarettes and other tobacco products could rise.

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For the alcohol segment, a more standardized tax structure across states, coupled with investments in responsible consumption initiatives, could unlock the sector's full potential, said Tushar Bhandari, Associated Alcohols and Breweries.

He added that targeted support, such as streamlined licensing processes or other pro-innovation measures, would greatly encourage entrepreneurship and creativity in this sector."

Last month, shares of gaming firms rallied on speculation that GST Council may take a lenient view of how their income should be taxed.

The online gaming industry has been seeking 28 per cent GST on gross gaming revenue (GGR) instead of the total amount deposited by players. “A clarity on the GST will help drive the next phase of growth, provide a conducive business environment, and revive investor confidence in the sector. These moves will make gaming a cornerstone of Digital India,” said Roland Landers, of All India Gaming Federation.

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However, the Council concluded without providing the expected relief, disappointing the industry.

Stocks to watch

ITC, Godfrey Phillip, and VST Industries are some of the key tobacco players to watch on Budget day for any announcements on excise duty. However, domestic brokerage Motilal Oswal feels fears of a hike in excise duty may be unfounded.

“Steady macro and government initiatives such as stable taxes and control over illegal cigarettes are expected to further help ITC to sustain volume growth,” said Motilal Oswal.

In the gaming space, Nazara Tech and Delta Corp will be big movers if there is any change in the taxation structure.

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