According to a report published by the All India Gaming Federation (AIGF) and EY India, the online gaming industry is expected to grow from $906 million in 2019 to $2 billion by 2023. The industry is likely to grow at a 22% Compound Annual Growth Rate.
The report analyses the GST implication that could impact business operations in the gaming industry. The federation suggests that the tax rate should not exceed 20% to stop gaming operators and consumers from entering the grey market. Rational taxation should be introduced to encourage operators to join the licensing system.
Roland Landers, Chief Executive of All India Gaming Federation, asked for more clarity on taxation from the government. He emphasized the need for internationally accepted principles of taxing the online gaming sector. He said, “The valuation disputes under GST law have been a dampener to the industry. It is important to highlight that regressive taxation of these emerging sectors may only make the business unsustainable in India. Our recommendation is that the tax authorities should align their policies with internationally accepted principles of taxing the online gaming sector and provide certainty to the industry.”
The gaming industry has created over 11,000 jobs in the country, and the e-sports segment is expected to generate about Rs. 100 billion of economic value between 2021 and 2025. The government should recognize the importance of this segment and take steps to facilitate its growth.
News Source: LiveMint
