India’s Finance Minister, Nirmala Sitharaman, announced on Tuesday that the Goods and Services Tax (GST) Council is currently deliberating on the taxation policy for online gaming. The Council, chaired by Sitharaman and comprised of finance ministers of states, is discussing various aspects of online gaming, including regulation and taxation policy. The minister is confident that the sector will attract investment once the policy is finalised.
Online Gaming Sector Expected to Grow
The online gaming sector has seen a significant rise in users in India during the Covid lockdown. According to a KPMG report, the sector is expected to grow to Rs 29,000 crore by 2024-25, from Rs 13,600 crore in 2021. The GST Council’s decision on the taxation policy for online gaming is expected to be finalised in its next meeting, which is likely to be held in either May or June.
Levying GST on Online Games
The issue of levying GST on online games has been unresolved for nearly two years, with many states advocating for a lower tax rate on games that require skill. They believe that games of skill should not be treated at par with games of chance. A final decision on the taxation of online gaming is expected to be reached soon.
New Norms for the Online Gaming Sector
Last month, the Ministry of Electronics and IT introduced new norms for the online gaming sector, which prohibits all games involving betting and wagering. The sector will follow a self-regulation model and will initially notify three self-regulatory organisations that will approve the games that can operate in the country as per the rules.
In her response to a question from a Korean gaming company Krafton on attracting foreign investment in gaming companies, Sitharaman expressed her admiration for Japanese and Korean animes, adding that she would love them to come to India. The minister believes that the mastery with which the story weaving happens in animes could bring positivity to adults today.