Karnataka’s minister for information technology and biotechnology Priyank Kharge on Monday (December 11) slammed the Centre for its recent regulatory actions on the Indian gaming industry, calling the demands of the government “unrealistic” and “unreasonable”.
“The gaming companies want to be regulated, but central govt is being unrealistic & unreasonable with their demands, which is not only killing employment in the sector, but is also driving away gamers to Chinese & European gaming sites where they are getting duped,” Kharge said in an X post.
The minister’s post is presumably slamming the recent 28% GST rule of the Centre on the online gaming industry. In July this year, the GST Council announced a 28% tax on the total value of bets for online games, irrespective of whether they are games of skill or chance. Earlier, a lower 18% GST was levied, particularly on the platform fee for skill-based games. Besides, now a 30% TDS is also levied on the annual earnings of online gamers.
Kharge noted that India has 1,400 online gaming startups and the country’s online real money gaming (RMG) segment enterprise has a valuation of INR 1,60,000 Cr. Besides, he said that in-game purchases and deposits have contributed INR 8,370 Cr through UPI transaction volume in India.
Citing industry estimates, he said that the corporate tax and TDS contribution to the exchequer by the RMG sector between FY24-28 will be INR 6,500-INR 6,800 Cr.
Also, the estimated GST contribution to the exchequer by the RMG sector between FY24-28 could be around INR 76,000 Cr.
In a similar post on Sunday, Kharge had said with a market size of INR 16,428 Cr in 2023, industry estimates suggest it will reach INR 33,243 crore in a few years. The sector also directly and indirectly employs around 1 Lakh individuals, with the prospect of expanding to 2.5 Lakh job opportunities by 2025.
“High time we realize the direct & indirect benefits the sector can get in investments, innovations and employment for the nation. If we don’t wake up soon, others will take the lead,” Kharge added.
Soon after the new GST regime came into effect on October 1, the RMG industry has already started feeling the impact on their revenue and user spending. Inc42 recently reported that online poker platforms are the worst affected by the changes, followed by rummy platforms.
In fact, industry experts also informed that RMG platforms, which promote games like rummy, poker, ludo, and others, might look at selling off their assets due to regulatory actions.
Meanwhile, a recent report suggested that the government has recorded a TDS collection of about INR 600 Cr from online gaming in the current financial year.
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