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Finance Minister Nirmala Sitharaman Confirms GST Council Deliberating On Taxation Policy For Online Gaming
On Tuesday, Finance Minister Nirmala Sitharaman stated that discussions regarding the taxation policy for online gaming are taking place at the ministerial level in the GST Council. The discussions include various aspects of online gaming and online gaming regulation. The Goods and Services Tax Council is chaired by Sitharaman and comprises finance ministers of states. Sitharaman exuded confidence in the sector’s potential growth and investment once the finalised taxation policy is in place.
Impact of Covid-19 Pandemic on Online Gaming Sector in India
The online gaming sector witnessed a sudden spike in the number of users during the time of the Covid-19 lockdown in India. According to a KPMG report, online gaming industry revenue in India is expected to grow to Rs 29,000 crore by 2024-25, from Rs 13,600 crore in 2021.
Taxation Policy on Online Gaming in India
The issue of levying GST on online games has been a point of contention for nearly two years, with many states advocating lower tax rates for games that require skill. According to them, games of skill should not be treated at par with games of chance. The GST Council plans to take a final decision on the taxation issue in its next meeting, which is most likely to take place in May or June.
The Future of Online Gaming in India
Last month, the Ministry of Electronics and IT issued new norms for the online gaming sector that prohibit all games involving wagering and betting. The sector will follow a self-regulatory model as three self-regulatory organizations will approve the games that can operate in the country as per the rules. The gaming industry shows great potential for growth in the country as long as the taxation policy is finalised.
Conclusion
The discussions taking place at the ministerial level regarding taxation policy for online gaming in India provide some clarity on the future of the sector. The sudden surge in growth during the Covid-19 pandemic has highlighted the need for effective regulation and taxation policies. The sector shows enormous potential for growth and investment. The upcoming decision by the GST Council will be crucial to its future prospects.
FAQs
What is the major point of discussion in the GST Council regarding online gaming?
The GST Council is discussing the taxation policy for online gaming and online gaming regulation at the ministerial level.
What has been the impact of the Covid-19 pandemic on the online gaming sector in India?
During the lockdown in India, the online gaming sector witnessed a sudden surge in the number of users. According to a KPMG report, the industry’s revenue in India is expected to grow to Rs 29,000 crore by 2024-25, from Rs 13,600 crore in 2021.
What are the provisions of the newly issued norms for the online gaming sector?
According to the newly issued norms, the online gaming sector will follow a self-regulatory model. Three self-regulatory organizations will approve the games that comply with the rules.
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