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Gamers write to FM Nirmala Sitharaman; addresses their concerns of 28% GST by the council

Gamers write to FM Nirmala Sitharaman; addresses their concerns of 28% GST by the council

The recent decision by the GST Council to increase taxation on the gaming industry has raised concerns within the gaming community. The increase from 18% to 28% in gross gaming revenue has prompted the gaming community to write a letter to Nirmala Sitharaman, the Minister of Finance, expressing their apprehensions about the potential adverse impact on earnings and other related issues.

One of the main concerns highlighted in the letter is the potential inability of gaming companies to absorb the increased tax burden. This could have significant implications for their financial viability and sustainability. The letter also raises concerns about the possibility of players seeking offshore platforms to continue playing due to the increased tax rate.

 

This could lead to user safety issues as Indian gaming platforms have implemented measures to protect users, particularly underage players, from abuse and mistreatment. The strict regulatory regime administered by the Ministry of Electronics and Information Technology (MeitY) has been instrumental in ensuring the safety of users.

Gamers write to FM Nirmala Sitharaman; addresses their concerns of 28% GST by the council | The Financial Express
The letter emphasizes the importance of maintaining a robust and conducive environment for the gaming industry in India. It urges the government to reconsider the tax increase and consider its potential consequences on the gaming ecosystem. The gaming community highlights the positive efforts made by Indian platforms to create a safe and regulated space for players. It expresses concern that an increased tax burden may undermine these achievements.

The concerns expressed in the letter reflect the anxieties of the gaming community regarding the impact of the tax increase. They emphasize the need to strike a balance between taxation and the sustainable growth of the gaming industry in India. The hope is that the government will consider these concerns and engage in a constructive dialogue with the gaming community to address their apprehensions and find a suitable resolution.

The letter from the gaming community highlights the impact of the increased taxation on the gaming industry, particularly on skill-based games. According to surveys conducted by the community, over 9,000 gamers expressed their intention to quit online gaming due to the tax increase. This indicates the significant concern and potential negative consequences of the taxation decision on the gaming community.

india inc: FM Nirmala Sitharaman for timely payments to MSMEs - The Economic Times
The letter also emphasizes that for some gamers, online gaming serves as a means of livelihood. Many individuals pursue gaming professionally and rely on it as a source of income. Imposing high taxation rates could result in a loss of income for these professional gamers, impacting their livelihoods and financial well-being.
Furthermore, the letter argues that excessive taxation on skill-based games can undermine their essence.

Skill-based games require intellectual abilities and strategic thinking, distinguishing them from games of chance. The increased tax may discourage newcomers from engaging in skill-based games and hinder the industry’s growth.
The statement from Jagdeep Singh, a professional poker player, highlights the concern that excessive taxation can transform skill-based games into games of chance, disregarding their core elements and reducing their appeal to players.

These perspectives from the gaming community shed light on the potential consequences of high taxation on the gaming industry, including the loss of gamers, the impact on livelihoods, and the discouragement of newcomers. The letter urges policymakers to consider these factors and strike a balance that supports the growth and sustainability of the gaming ecosystem while also addressing the government’s revenue objectives.

The letter from the gaming community expresses the view that the decision of the GST Council overlooks their fundamental right to livelihood, as guaranteed by Article 21 of the Constitution. The district argues that the increased taxation on online gaming has the potential to negatively impact the livelihoods of those who rely on gaming as a source of income.

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In addition to raising concerns about the impact on livelihoods, the letter requests a collaborative approach to addressing the taxation of online gaming. The community suggests involving representatives from the gaming community in discussions with the finance minister. This approach aims to foster a balanced and informed decision-making process, considering the perspectives and expertise of those directly involved in the gaming industry.

By calling for a collaborative approach, the gaming community seeks to engage in constructive dialogue with the government to ensure that decisions related to taxation in the online gaming sector are fair, reasonable, and considerate of the industry’s unique characteristics. This approach encourages the government to consider the viewpoints and experiences of the gaming community, leading to a more balanced and informed decision-making process.

Overall, the letter emphasizes the importance of recognizing the fundamental right to livelihood and urges the government to adopt a collaborative approach involving representatives from the gaming community.

This approach aims to ensure a balanced and fair decision regarding the taxation of online gaming, taking into account the industry’s dynamics, the livelihoods of individuals involved, and the overall growth and development of the gaming sector in India. The letter from the gaming community highlights the need for differentiation in the taxation of online games.

It argues that various online gaming activities possess different levels of competitiveness and skill. Categorizing all forms of online gaming under a single tax bracket fails to acknowledge the distinct differences in skill, expertise, and the diverse nature of these gaming activities.

The letter calls for the government to understand the fundamental difference between a game of skill and chance and regulate them accordingly. Neeraj Sattawat, a professional poker player, stresses the importance of recognizing this distinction to develop appropriate regulations and taxation policies.

The backlash from industry players and gamers against the decision reflects the concerns and frustrations within the gaming community. The increased taxation without differentiation is seen as disregarding the unique characteristics of skill-based games and their players. The district argues that excessive tax on skill-based games can undermine their essence and discourage newcomers from engaging in these activities.

The letter emphasizes the need for the government to consider a more nuanced approach to the taxation of online gaming. By recognizing the differences in skill levels and competitiveness among various gaming activities, the government can develop targeted regulations and taxation policies that are fair, transparent, and supportive of the industry’s growth.

In response to the concerns raised by the gaming community, it remains to be seen what the government’s next plan of action will be. Policymakers must engage in constructive dialogue with industry representatives and consider the diverse perspectives within the gaming ecosystem. A collaborative approach involving stakeholders from the gaming community can help find a balanced and informed solution that considers the intricacies of online gaming and safeguards the interests of all parties involved.

Ultimately, a comprehensive understanding of the distinction between skill-based games and games of chance, coupled with effective regulation and taxation policies, will be vital in ensuring the sustainable growth and development of the online gaming industry in India.

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