ESFI provides clarity on 28% GST, esports and video game industry unaffected

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The recent GST council announcement have sent gamers and gaming companies wondering how the decision will affect the industry as a whole. Further, it seems that the decision is not fully clear, as several gamers and esports players have voiced their concerns about the GST.

Although revenue secretary Sanjay Malhotra clarified that only real money games are affected by the changes, the Esports Federation of India (ESFI) have now also released a statement clarifying the ambiguity surrounding the implementation of the GST.

President of ESFI, Vinod Tiwari, said, “it is imperative to first understand that the 28% GST is going to be applicable to the iGaming sector, including Real Money Gaming (RMG), fantasy sports, teen patti, rummy, and poker which are categorised under gambling or betting in the rest of the world. Contrary to some media reports, this GST is neither applicable nor will it have any impact on the ‘Video Games’ or the Esports industry.”

Tiwari also believes that since the term online gaming is used for all forms of gaming worldwide, the GST council should have used iGaming or simply real money gaming to make it simpler to understand.

He further focused on the need to acknowledge that most of the current 400 million gamers in India and over 3 billion gamers worldwide play games for entertainment and not for financial gains.

“It is regrettable that in India, our Video Games or Esports Industry is often unjustifiably associated with ‘iGaming, betting, RMG, gambling, and many more, which creates unnecessary confusion and misperceptions,” Tiwari added.

Esports was also recognized as part of multi-sports events by the government last year as it has shown a lot of potential. Indian esports team have now started representing the country in several international tournaments.

Currently, 15 esports athletes will be representing India in the upcoming Asian games in Hangzhou, China in video game titles DOTA 2, FIFA Online 4, League of Legends, and Street Fighter V: Champion Edition.

While the changes in GST may hit hard on the real money gaming sector, it can help shift focus to the esports and video game sector, which the government have also started focusing on recently with the country’s first-ever esports academy.

With time and proper practice, the players are expected to reach great heights in the esports industry. Moving forward, esports and video gaming as a whole (streaming, game development, AVGC) can easily help India to become one of the largest gaming hubs across the world.