Nirmala Sitharaman: The Good and Services Tax Council has decide to impose 28% tax on turnover of revenue generated by online gaming firms. Horse racing and gambling are too be taxed as well after the decision was reached by a GoM (group of ministers) panel on Tuesday. The group comprised of Finance Minister Niramala Sitharaman and representatives from States and Union territories.
The issue before the panel was whether to impose a 28 per cent GST on the face value of bets or the platform fess or the entire sum of revenue. FM Sitharaman announced that tax will be imposed on the entire value.
No differentiation over Game skills
The tax will be fully imposed on online gaming companies without making any differentiation on skill set required by the game or whether it is based on chance. Cancer fighting drugs and medicines for rare diseases have been exempted from the GST Council. Satellite launch services have also been given exemption from implementation of tax code.
Rate reductions also approved
The Council meet on Tuesday also approved rate reductions on 4 items. Tax on Uncooked, unfried & extruded snack palettes will be brought down from 18 to 5 %. Tax on fish soluble paste will also see similar rate change. LD slag tax also to be changed from 18% to 5%. At last, imitation zari thread will be brought down from 12 to 5%.
Users on Twitter also made appeal to FM Sitharaman over reductions on other products. The appeals featured specific industries from handloom and paper to Cryptocurrency.
Council doesn’t intend to “end any industry”
Nirmala Sitharaman also clarified that government doesn’t intend to bring about end of any industry and there was discussion over moral question which doesn’t necessarily translate to extedning more incentives over essential items.
“All states participated in this decision which has been pending for the last 2-3 years. We could take the decision today because every state clearly participated in it,” she further added.
Industry experts are of belief that the decision will not only discourage players but also put strains on lives of professionals who earn their bread the industry. The decision will force players to play on offshore platform and digital processing ecosystem may become redundant.
BharatPe founder Ashneer Gorver took to Twitter to express his view on the decision “It was good fun being part of the fantasy gaming industry – which stands murdered now. $10 Bn down the drain in this monsoon. Time for startups Founders to enter politics and be represented – or this is going to be spate industry after industry.”
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