Impact of GST on Online Gaming:  Karnataka IT Minister Priyank Kharge highlights Adverse Effects of Imposing a 28% GST on Online Gaming Activities

Karnataka IT Minister Priyanka Kharge highlights the adverse effects of imposing 28 % Goods and Service Tax (GST) on online gaming activities.
Karnataka IT Minister - Priyanka Kharge - Revenue Minister - Online Gaming -TAXSCAN

The online gaming industry in India is facing a crisis, primarily attributed to the lack of clarity in government policies regarding games of chance and skill. The conflicting views of prominent ministers, including IT Minister Priyank Kharge and Revenue Minister Krishna Byre Gowda, have further compounded the issue.

Priyank Kharge, the IT Minister, contends that the primary issue plaguing the industry is the absence of clear guidelines differentiating between games of chance and skill. He has repeatedly criticized what he perceives as ‘unrealistic and unreasonable’ demands imposed on the gaming sector.

The contradictory opinions within the government, exemplified by Revenue Minister Krishna Byre Gowda, reflect a lack of consensus on online gaming taxation. When questioned about this disparity, Kharge emphasised the need for a comprehensive understanding of the technical aspects of the industry.

He highlights the adverse effects of imposing a 28% GST on online gaming activities. He claims that within a week of its implementation, the industry witnessed approximately 7,000 layoffs and the closure of several smaller firms. Kharge decries the government’s lack of comprehension of technology, focusing on the detrimental impact of the taxation policy.

The IT Minister insists on a clear distinction between skill-based games, such as chess, and games of chance. While expressing his firm stance against gambling, Kharge emphasizes the need for the government to understand the nuances of various gaming activities and craft policies that reflect this understanding.

Kharge criticizes the government’s approach to gaming policies, metaphorically stating that, “When you get a cold, you take medicine, not cut the nose.” He argues that the government’s current policies are detrimental to the industry and calls for a more nuanced and informed approach.

The online gaming industry in India is at a crossroads, and the conflicting perspectives within the government are exacerbating the challenges it faces. IT Minister Priyank Kharge’s call for clarity, understanding, and a differentiated approach to gaming policies is crucial for the sustainable growth of the industry, emphasizes the need for policymakers to appreciate the technical intricacies and distinctions within the diverse realm of online gaming.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates