GST Council defers 28% GST on online gaming

The GST Council has deferred its proposal to impose a 28% tax up from the current 18% tax on online gaming, casinos and lottery. The Council has asked the Group of Ministers to re-examine the issues based on further inputs from States and submit a fresh report by June 15, 2022.

As reported earlier, E-Gaming Federation (EGF), All India Gaming Federation (AIGF) and Federation of Indian Fantasy Sports (FIFS), three largest online skill gaming associations in the country, had expressed concern over the likely increase in GST rate on online skill games from existing 18% to 28%. Highlighting that the sector has immense economic benefits, the industry associations appealed to the GST Council to understand the salience of Games of Skill and take a decision considering international taxation best practices.

Meanwhile, the GST Council has also waived off the compulsory registration norms for small businesses.

Reacting to this decision, Vidit Aatrey, Founder & CEO, Meesho, said, “Meesho has always been a strong proponent of digitising small businesses and we applaud the GST Council’s move to relax GST registration norms. This step brings much-needed parity between offline and online businesses. With an estimated 5 crore MSMEs currently unable to sell online due to compulsory GST requirements, this game-changing measure can be an enabler for millions of small units including artisans, boutiques and mom-and-pop stores. For example, in 2022, ~60% of small businesses looking to come online on Meesho dropped off on account of GST requirements. While MSMEs will benefit from a much larger addressable market, increased efficiencies and easier access to capital, the move will spur the Indian economy and unlock massive tax revenues for state governments.”

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