What gaming companies want from Union budget 2023: Lower GST and regulation clarity – Times of India

India’s gaming sector had a mixed 2022. While there seems to be a prolonged funding winter; the government’s recognition to the e-sports industry as a legitimate sport has brought in cheer. In December last year, esports was integrated with mainline sports disciplines in India by the government. It was recognised as a part of a multisport event and came under the ambit of the Department of Sports under the Ministry of Youth Affairs and Sports. In the past few years, the online gaming sector in the country has witnessed significant growth. The industry is looking forward to favourable policy, especially in terms of taxation in the upcoming budget. The industry expects some sops on taxation and clarity regarding GST in the upcoming Budget.
Here’s wishlist from two of the biggest players in the industry:
Sai Srinivas, co-founder and CEO of MPL
“2023 is already shaping up to be a watershed moment for the gaming industry. With the government releasing draft online gaming rules earlier this month, the burgeoning sector will see a lot more success this year. In addition to this, the industry hopes to get clarity in a few areas. The first is the GST mechanism on online gaming. We hope the government provides clarity on the tax slab applicable on skill gaming. Another relates to the AVGC fund set up as part of the AVGC Promotion Task Force announced in last year’s budget. Access to financial support, as envisaged under this, will be a tremendous boost to young talented developers and designers, and will accelerate the push to ‘Create in India’ and take made-in-India games to the world. We believe that India’s online gaming industry can truly lead the charge in the global digital economy and a uniform, progressive policy can be the wind in its sails.”
Paavan Nanda, co-founder of WinZO
“The online gaming industry has the potential to scale rapidly and become a significant contributor to the Government’s vision of a trillion-dollar digital economy. The industry is currently in its nascent stage, and needs stability and clarity from a tax and compliance perspective. The proposed 28 percent GST on the Gross Gaming Value of all games played, over the current 18 percent on the commission of the gaming companies, would have an existential impact on the segment. Further, a reduction in the TDS threshold, from the current winnings exceeding INR 10,000, could also impede the growth of the industry. The TDS liability on winnings above 10,000 already stands at 30% under the Income-tax Act of 1961. The increase in GST and TDS cumulatively would completely wipe out the homegrown industry that has the potential to be the largest next generation of exports of consumer tech products made in India for the world. In this budget announcement, we are hoping to see a continuation of the current GST slab and TDS threshold as a sharp increase in tax will deter growth, sink early-stage startups further into losses and overall make the industry unviable. A clear and supportive tax policy will not only generate revenues for the exchequer but will also create great value in the long run for the country and the gaming ecosystem. In last year’s budget, the government recognised the gaming sector as one of the potential segments for job creation in India and set up the Animation, Visual effects, Gaming, and Comics (AVGC) promotion task force to realise the potential of the segment. We are hoping for the announcement of constructive action in that direction to give a boost to the gaming industry,” Paavan Nanda, co-founder of WinZO.