The Indian government is considering providing some tax relief to the country’s online gaming industry, with a new proposed amendment to the Goods and Services Tax (GST).
Ahead of an upcoming meeting of the GST Council on June 22nd, the Finance Ministry has proposed an important amendment, according to Business Today India.
The proposed change would give the government the power to not demand payment of any GST that was not properly charged or collected in the past.
This is aimed at addressing the confusion that has surrounded the 28 percent GST rate that was imposed on online gaming last year.
The online gaming industry had strongly objected to this high tax rate, arguing that it would seriously harm their fast-growing businesses. The new amendment could retroactively validate the industry’s past practices of not fully applying the 28 percent GST.
This would prevent gaming companies from facing huge retrospective tax demands that could severely impact their finances.
If the GST Council approves this amendment, it could mean that the 28 percent GST may no longer be collected on online gaming, casino, and horse racing activities going forward. This is expected to bring stability and clarity to the sector.
The proposal came from a recommendation by a committee that advises the GST Council. However, the amendment will not provide any refunds for any excess GST that companies may have already paid.
The GST Council meeting will also discuss how to handle the over INR1.5 lakh crore ($17.9 billion) worth of tax demand notices that have been sent to 80 online gaming companies in the country.
Overall, this potential GST relief signals the government’s effort to support India’s fast-growing online gaming industry, which has seen a 400 percent increase in tax revenues since the 28 percent rate was introduced.
