All India Gaming Federation calls the new taxing law on Online Games “unconstitutional, irrational, and egregious”

The All India Gaming Federation (AIGF) issued a Statement on the Recent GST Council Decision regarding GST on Online Gaming. AIGF calls the new taxing law on Online Games “unconstitutional, irrational, and egregious”.

The recent decision by the GST Council to impose valuation for online gaming on deposits rather than platform fees comes at a time when the world was watching the meteoric rise of online gaming in India that would build IP and technology as the next line of exports, with the sector attracting over 2 billion USO in investment in the last few years.

However, with a 400% rise in GST obligation, the great majority of businesses who have innovated in the area would be disproportionately impacted, with many MSMEs and Startups going out of business. Since the ruling, several firms have announced closures or widespread layoffs, and we expect this trend will continue in the coming months.

Unfortunately, the decision will result in an emergence of an oligopolistic market. Only a few established and well entrenched companies will be able to scrape through this change by using their existing capital reserves, though, even their revenues and valuations will significantly fall.

However, as the oldest and largest industry body representing the greatest number of MSMEs, we will continue to work with the Hon’ble Members of the GST Council and the Union Ministry of Finance over the next six months to advocate for a stable and progressive regime that restores the Indian online gaming sector to global leadership and contributes to India’s vision of becoming a global gaming powerhouse.