Is the new GST rate going to end the gaming industry in India?
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GamingTranscript
00:00Your online games might get more expensive due to the new GST rate that is going to be levied on them.
00:05And experts said it might cause the booming industry to die.
00:13Finance Minister Nirmala Sitharaman announced in July 2023 that online gaming,
00:18horse racing and casinos would be taxed at 28% on their full face value.
00:23Face value is the base amount you would invest in a game.
00:27For example, if you put 100 rupees in a game, that 100 bucks is your face value.
00:44She said online gaming and horse racing were the new additions to taxable things
00:49apart from betting, gambling and lotteries.
00:53The new GST rate drew mixed reactions on social media,
00:59with some making memes on the situation too.
01:22The Indian online gaming industry had grown massively in 5 years.
01:31More than 900 gaming start-ups were currently functional
01:35and influential celebrities were also endorsing online games.
01:42The industry's significance was also not lost on the government.
01:52The All India Gaming Federation called the new GST rate unconstitutional
02:12and said it would wipe out the entire Indian gaming industry.
02:16Revenue Secretary Sanjay Malhotra said the new GST on online gaming
02:20would generate an extra annual revenue of 20,000 crore rupees.
02:24He also said there won't be any need to review the decision
02:28because it was taken unanimously by the GST Council.
02:31Already existing tax rules say that if you win more than 10,000 in an online game,
02:35you would have to pay 30% tax on that too.
02:38But the Finance Minister insisted
02:50that in order to promote casinos,
02:53which is a very important issue for the United States,
02:58the tax should be less than food products.
03:03On one hand, you don't want to wipe out the gaming industry,
03:08but that doesn't mean you should give them more encouragement than essential goods.