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February 23, 2023
By
Paramita

Online Gaming May Become Expensive: 47th GST Council Meet

On 17th September, 2021, the 47th GST Council Meet was held in Lucknow, Uttar Pradesh. One of the key decisions taken at the meeting was to tax online gaming at a rate of 28%. This decision could have significant consequences for both Indian Small and Medium Business Owners and Startup Founders who are involved in the online gaming space.

This move has come as a surprise to many in the industry who were not expecting such a high rate of tax. The rate of 28% is significantly higher than the current tax rate of 18% that is applicable to online gaming services. It is also higher than the rate of 12% that is applied to other forms of entertainment such as cinema and theatre.

The decision to increase the tax rate on online gaming has been taken in light of the growing popularity of online gaming in India. The industry has been growing rapidly in recent years, with more and more Indians playing games on their smartphones and computers. The GST Council has stated that the increased tax rate will help to generate revenue for the government and bring online gaming services in line with other forms of entertainment.

However, this decision is likely to have a significant impact on the industry. The increased tax rate may result in higher prices for online gaming services, which could lead to a reduction in demand. This, in turn, could lead to a decrease in revenue for Indian Small and Medium Business Owners and Startup Founders who are involved in the online gaming space.

Moreover, the online gaming industry is also likely to face increased competition from international players who may offer services at a lower tax rate. This could lead to Indian businesses losing market share and revenue.

It is also important to note that the online gaming industry is not just about entertainment. It is also an important source of employment for many Indians. The industry employs a large number of people in areas such as game development, marketing, and customer support. The increased tax rate may have a negative impact on employment in the industry, which could have wider implications for the Indian economy.

Overall, the decision to increase the tax rate on online gaming is likely to have significant consequences for Indian Small and Medium Business Owners and Startup Founders who are involved in the industry. It remains to be seen how the industry will respond to this decision and what the long-term implications will be.

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