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Online gaming firms wary of higher GST rate; say tax on prize money will impact business

Reactions from companies in the field have been cautious, with apprehensions over which tax slab gaming firms will fall under.

November 10, 2021 / 05:12 PM IST
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The Xbox Cloud Gaming service is now available for iOS devices and Windows 10

 
 
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It was reported last month that the government may consider a single tax rate for online gaming companies and will also ascertain whether goods and services tax (GST) should be applicable only on the amount retained by the platform or also be levied on the prize money.

Reactions from companies in the field have been cautious, with apprehensions over which tax slab gaming firms will fall under.

Tarun Gupta, founder, Ultimate Battle, an online e-sports platform, said that having a single tax rate on the gaming industry will help it grow.

However, he also pointed out that central legislation defines the laws pertaining to games of chance that have a tax rate of 28 percent. “Games of skill don't fall under the ambit of gambling and gaming laws. A GST rate of 18 percent is applicable as per the industry standards,” he said.