Lok Sabha Member of Parliament (MP) and popular actor Deepak Adhikari, listed a series of questions regarding Goods and Services Tax (GST) collection from online gaming apps towards the Minister of State (MoS) for Finance, Pankaj Chaudhary during the Lok Sabha session.
Adhikari asked for total GST collected by government from all gaming apps till October 31, 2023. To this, Pankaj Chaudhary replied that they do not collect GST directly from gaming apps. Instead, the entire liability to pay taxes is upon the registered person, he replied.
Regarding the question of total number of gaming apps currently operating in India alongside their annual turnover, it was revealed that the government does not maintain any such data.
The next question asked by was regarding the number of unauthorized gaming apps banned till the aforesaid date. The reply to this query was in relation to the apps banned by the Ministry of Electronics and Information Technology (MeitY).
MoS Chaudhary responded how MeitY has blocked a total of 581 applications u/s 69A of IT Act, 2000. Out of these, as many as 174 belonged to the illegal betting and gambling category. Mobile gaming apps such as PUBG and Garena Free Fire were also included in the list.
It is worth mentioning that despite blocking betting and gambling apps, many are still operating through mirror domains. Apart from that, there was news of the ban on Free Fire being removed, however, no updates have followed after that.
28% GST hits RMG industry
Taking action on the growing real-money gaming (RMG) industry, the GST council implemented 28% GST on online gaming. Since then, the journey for RMG industry hasn’t been a smooth ride, leading to multiple lay-offs and shutdowns.
Many industry persons and experts opined that 28% GST might not be a feasible option, keeping growth in mind. The online gaming companies are also facing heat amidst the recent GST showcause notices. Nearly all big firms like Dream11, Gameskraft, Deltatech Gaming, Games24x7, etc. have received GST notices.
Gaming companies have contested these notices in various court, claiming that the demand is unreasonable and is based on retrospective taxing.
As of now, the total amount of GST asked by the authorities has crossed over Rs 1 lakh crore. The matter is expected to be presented in Supreme Court, which will ultimately decide the fate of online gaming Industry.