In a recent interaction with, The New Indian Express, John Joseph, former chairman of CBIC and current Strategic Adviser at DeepStrat, provided key insights into the evolving GST regulations impacting the online gaming industry. Emphasizing the need for legal clarity, he addressed the retrospective and prospective aspects of the new amendments, highlighting the industry’s prior taxation practices and the substantial changes brought about. Here are excerpts from the interview:
Clarification on GST for Online Gaming:
Mr. Joseph stressed the importance of the government and GST Council providing legal certainty for the online gaming industry, investors, and employees. He highlighted the absence of retrospective application in the GST Council’s discussions and recent amendments, urging for clarificatory statements to restore legal certainty.
Impact of Retrospective Implementation:
Joseph outlined the amendments effective from October 1, 2023, introducing definitions, fixed tax rates, and changes in taxable value for online gaming. He addressed concerns about retrospective implementation, emphasizing potential adverse effects on companies and the need for the government to uphold legal certainty.
Previous Taxation Practices:
Explaining previous practices, Joseph highlighted that online money gaming lacked explicit definition, certain actionable claims were exempt, and online gaming fell under the OIDAR category, attracting 18% GST on platform fees. Post-amendment, the entire deposit is taxed at 28%, significantly impacting the industry.
Assessment of the Impact:
Joseph assessed the impact of amendments, acknowledging the increased tax burden on online gaming companies. While recognizing legal certainty post-amendment, he suggested that a clarification on the prospective applicability of the amendment would be crucial for the industry and revenue department to meet their goals. He also urged a review of the decision’s economic impact and consideration of potential revisions in due course.