THE GAMING TAX-TANGLE

THE $3-BILLION INDIAN ONLINE GAMING INDUSTRY CAUGHT THE EYE OF THE WORLD. BUT THE 28 PER CENT GST ON REAL-MONEY GAMING HAS BROUGHT ITS DREAM RUN TO A SCREECHING HALT

- SURABHI AND BHAVYA KAUSHAL

THE STORY SO FAR

• As a result of this development, online gaming companies in India have laid off staff and are restructuring their businesses
• The number of online gamers grew to 507 million in the fiscal year 2021-22 from 450 million in the previous year, per eSports Players Welfare Association
• Experts believe this may reduce the size of the industry by half as they expect more companies to shut down or domicile abroad in gamingfriendly nations
• The outlook has become cloudy with the taxman's decision to impose 28 per cent goods and services tax (GST) on the deposit amount for online gaming
• Online games such as fantasy sports, poker, rummy, ludo, carrom, puzzles, etc., are more popular among the younger generation (16-25 years)

MUMBAI-BASED AARUSH AHUJA (name changed) felt his world come crashing down when he saw news channels flashing the headline, ‘GST at 28 per cent on online gaming, horse racing, and casinos at full value’. The 34-year-old couldn’t process the development. He switched off the TV and went to his bedroom. The first thing he noticed was his trusted Sony PlayStation 2 that had started his gaming journey.

Ahuja had been obsessed with gaming since childhood, so much so that his parents would often worry. But Ahuja didn’t care; he continued to pursue his passion while balancing his studies. When the time came, he joined an engineering college.

But his heart was in gaming and he dropped out. Scouting for opportunities to pursue his passion, Ahuja came across the founder of an online gaming firm, who was impressed by his passion for gaming.