Computer and Video Games (Indian Market)

2023: India imposes tax on online gaming It will be paid by the developers

On August 11, 2023, the Lower House of Parliament India approved the introduction of a tax of 28% on online games, casinos and horse betting. sport This can lead to a significant transformation of the industry.

Amendments being made to the basic GST law include definitions of online games, online money games and virtual digital assets. The law comes into force on October 1, 2023. Finance Minister Nirmala Sitharaman said the decision to impose a major tax on the online gaming industry came after consultation with state authorities. However, market participants argue that this will create serious problems for the industry. In particular, small companies may close, while large ones will begin to reduce staff. To maintain turnover, Indian firms will be forced to register in other jurisdictions.

Indian parliament approves 28% tax on online gaming

The introduction of a tax rate of 28% will hit the gaming industry hard. This higher tax burden will affect companies' cash flows, "said Aaditya Shah, chief operating officer of gaming app IndiaPlays.

However, Tanushri Roy (Tanushree Roy), director of indirect taxation at Nangia Andersen India, said the changes will bring "much-needed clarity in the interpretation of activities in these sectors" under the GST law. Anyone providing online gaming services with money from overseas regions to users in India is required to register to pay taxes under the new rules, he said. In general, experts believe that the adopted law will lead to the consolidation of the online gaming industry in India. At the same time, the government will receive an additional income item, which will help in the implementation of other initiatives.^[1]

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