MeitY To Approach GST Council On Online Gaming Tax Once Sustainable Framework Is Established

MeitY To Approach GST Council On Online Gaming Tax Once Sustainable Framework Is Established


Minister of State (IT) Rajeev Chandrasekhar announced at an event that the Ministry of Electronics and Information Technology (MeitY), responsible for regulating online gaming, plans to approach the GST Council to reconsider the decision to impose a 28 per cent tax on online gaming. Chandrasekhar emphasised the need to establish a comprehensive regulatory framework for online gaming before addressing taxation concerns.

“We are still in the early stages of developing a sustainable and permissible online gaming framework. Once this framework is established, we will approach the GST Council and request their reconsideration based on the new regulatory guidelines,” stated Chandrasekhar.

In a recent tweet, Chandrasekhar acknowledged the evolving nature of the regulatory framework for online gaming, emphasising the importance of defining permissible online games. He mentioned that the finalised framework would subsequently be communicated to the GST Council.

The GST Council announced on July 11 its decision to impose a 28 per cent goods and services tax on the revenue generated by online gaming companies, horse racing, and casinos.

Chandrasekhar highlighted the distinction between the GST Council and the Government of India, explaining that the council operates as a federal organisation, representing all state governments. He clarified that the council’s decision was the result of three years of collective effort, while the process of formulating the online gaming regulatory framework had only begun in January 2023.

ALSO READ: Online Gaming GST FAQs: Are Any Games Exempt From 28% Tax? How Will It Impact Players’ Wins? All Your Questions Answered

While acknowledging the discontent within the online gaming industry due to the GST Council’s decision, Chandrasekhar advocated for a cautious approach to developing regulations. He emphasised the importance of creating sustainable frameworks through careful consideration, rather than hastily reacting to industry or startup grievances, which could lead to unintended consequences.

ALSO READ: ‘May Force Gamers To Offshore Platforms’: As GST Council Levies 28% Online Gaming Tax, Here’s How The Industry Is Reacting

“We believe that, and Prime Minister’s very clear: In the digital space, do everything from the perspective of the next decade. So the laws, rules, all go through detailed, deep consultation with the stakeholders and then we take people on board. The online gaming rules went through 3.5 months of consultation and what the government started with and what we ended with were totally different. So, it’s better to do it right than to do it fast.” added Chandrasekhar.

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