With the Government proposing to overhaul the GST regime with a special rate of 40 per cent on “sin and demerit goods”, the top slab is likely to see the inclusion of pan masala, tobacco, cigarettes, luxury cars, SUVs — and online gaming.
According to sources, the Department of Revenue has kept in mind the country’s “social ethos” while tagging goods and services in the “sin and demerit” category, and online gaming is seen to be fitting that definition.
If this move is finalised, it is likely to cause an upheaval among online gaming companies, ranging from fantasy sports and real gaming platforms, which have previously complained of the 28 per cent GST levied on them.
The latest consideration also comes amid growing concerns within the Central and State governments over the amount of money being spent on these platforms, and the ease with which these companies enable automatic deductions for payments, sometimes without consent, during consecutive rounds of a game.
The 40 per cent rate, which is likely to be recommended by the GST Council, could also benefit the Central and state governments fiscally, with substantial revenue gains expected.
The sector has shown fairly inelastic demand previously, when the GST rate was set at 28% from 01.10.2023.
Read more at: The Indian Express
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