In a bid to foster the growth of start-ups and safeguard the burgeoning online gaming industry, Delhi's Finance Minister, Atishi Marlena Singh, has appealed to the GST Council to reconsider the imposition of a 28% tax on online gaming. The 51st meeting of the GST Council, held on 2nd August, witnessed Atishi's passionate plea to distinguish 'Online Games' from 'Gambling and Betting Games' and to revise the taxing approach to avoid adverse effects on the sector.

Atishi Marlena Urges GST Council to Rethink Taxation on Online Gaming

The GST Council's decision during its 50th meeting to apply a uniform 28% tax on full face value for online gaming, casinos, and horse racing raised concerns within the online gaming community. However, Atishi was quick to clarify that this tax measure would not impact regular games like Dota 2, Fortnite, Valorant, BGMI, and others, regardless of their platform - PC, console, or mobile.

Atishi's proactive stance emerged from her conviction that the growth of start-ups is intrinsically linked to India's economic development. She argued that online gaming should not be treated the same as gambling and betting, as it fosters a diverse ecosystem catering to people of all ages who enjoy games like Chess, Carrom, Car Racing, and various other titles.

The Finance Minister expressed fears that imposing a 28% GST on the online gaming industry would have disastrous consequences. This rapidly expanding sector, which has attracted millions of dollars in investment and created thousands of job opportunities, could face imminent collapse. She underscored the pivotal role of online gaming as the fastest-growing segment and questioned the logic behind burdening it with such a high tax rate, which could dissuade potential investors from supporting start-ups in the country.

Atishi's concerns were amplified by her interactions with representatives from the online gaming industry. The main contention lies in the proposed implementation of a uniform 28% tax on every game, irrespective of its nature or duration. This approach, she highlighted, would pose significant challenges for industry stakeholders and could lead to a potential loss of about 50,000 jobs. Moreover, the uncertainty in taxation and regulatory measures may discourage future investors from funding Indian start-ups.

The Finance Minister's plea to the GST Council comes at a critical juncture, where fostering innovation and nurturing entrepreneurship are essential for India's economic growth. Atishi's call for a differentiated tax regime that recognizes the distinctions between online gaming and gambling is in line with the government's larger vision to create a conducive environment for start-ups to thrive.