During the 50th meeting for the Goods and Services Tax, it was announced that ‘online gaming’ will be met with a GST of 28%. The amount will be levied on the full value of online gaming and casinos and there will no longer be a differentiation between games of skill and games of chance. While this might sound ominous to Indian gamers, the wording is slightly misleading. In fact, the esports and video gaming scene is not going to be affected by the 28% tax at all.
In actual fact, the 28% rate is only applicable to online casinos, fantasy league, real money gaming and games such as teen patti, rummy and poker. It will not affect mobile online games such as BGMI. It also will not affect online PC games such as Counter Strike: Global Offensive, Dota 2 or FIFA. This is because esports and video games are recognised as sports by the government, while card and gambling games are not.
Additionally, it is not clear whether the GST will apply to lootbox or ‘gambling-like’ mechanics that exist in games such as Counter Strike.
Vinod Tiwari, President of the Esports Federation of India, said “Esports has been officially recognized as a sport by the government which finally and thankfully distinguishes it from any and all activities like iGaming such as fantasy, teen patti, rummy, poker, betting, and gambling, among others. It will carry on being taxed the way it always has been. Theories of ‘game of skill’ and ‘game of chance’ which only exist in our country neither apply nor are relevant in the Esports ecosystem.”
Indian government must avoid ‘online gaming’ umbrella term, says Tiwari
In April the Indian government set out to comprehensively reform GST for, and make amendments to, the online gaming ecosystem. Tiwari said before that the government must avoid the use of the online gaming umbrella term as it unfairly includes esports and casual gaming in it, though that is not the intention of the government. He instead suggested that the term iGaming would be more appropriate.