Online gamers from small towns seek withdrawal of 'punitive' 28% GST

Ahead of the Goods and Services Tax (GST) Council meeting to be held via videoconferencing on August 2 to take a final call on the levy of 28 per cent GST on online gaming, casinos, and horse racing, hundreds of gamers from small towns and cities are getting together, taking to the streets, to appeal to the government for the withdrawal of the 28 per cent GST on online games.

These gamers have been playing online games as a passion and also to earn extra money to support their living.

Forming a group called ‘Indian Gamers United’, these small-town gamers are carrying out peaceful road-demonstrations in cities like Jaipur, Nagpur, Bhopal, Raipur, among others to appeal to State Finance Ministers and the Finance Minister of India, seeking respite from a punitive 28 per cent GST being proposed on online gaming.

Some of these gamers have written an open letter to the Finance Minister Nirmala Sitharaman stating that many of them not only play games on mobile as a passion, but also use it to earn money and maybe even livelihood. They are also turning to social media platforms like twitter and Instagram to get the attention of the policy makers for withdraw of the high rate of GST.

These small-town gamers believe that the government should support small gamers.  They fear that they will be unable to afford gaming on legitimate platforms if the tax is made high and many of the uninformed gamers would end up succumbing to the lure of illegitimate offshore gaming platforms, and thereby creating a high risk for themselves. Gamers believe that the Government should be sensitive to their needs and not push genuine gamers towards these illegal betting and gambling platforms.

These small gamers are also planning a nation-wide petition in support of their demands.  

Himanshu Shekhar, a gamer from Karnal said, “There has been a steady rise in the availability of good online gaming options in the last few years. Gamers from small towns find these real-money games extremely rejuvenating and rewarding as they allow them to convert their skills into money gains. A very high tax of 28% on online games will kill this industry and will push the gamers towards illegal and offshore platforms where no tax is payable. This will put the gamers into a very high risk. We urge the Government to provide a tax-friendly online gaming regime.”

Today, online gaming is a true symbol of India’s digitization across tier 2 to tier 3 towns. There are 400 million gamers registered with various platforms in India, a majority of whom are from small towns and cities. 

With consumption of online content reaching a point of saturation, online gaming has emerged as the next major option for recreation and rejuvenation for people across all age groups. 

Since, several of these games come with the option to earn monetary rewards, this is giving rise to a segment where young people are using their gaming skills to earn money in their free time and becoming part of the gig economy. 

An unviable rate of GST at the rate of 28 per cent on online games will kill this growing industry untimely, sending these growing tribe of online gamers into a vacuum. These restless young people can resort to high-risk behaviour if not channelized properly.

Demanding an urgent intervention from the Government, Raj Roy, an online gamer from Churu, Rajasthan elaborated, “We appeal to the Government to support gamers particularly the small gamers of India coming from thousands of small cities and towns, by providing tax friendly policies. We need clean, legitimate games to play. Since lakhs of gamers have already entered the online gaming space, a sudden stoppage of the sector because of high taxes will cause a huge amount of mental and monetary stress on these people. Gambling is legal in countries like UK, Europe, Australia, New Zealand, Americas, African countries and Asian countries like Japan, Philippines and China and European, and therefore there are more gambling options than gaming options in the world. India is perhaps the only country where non-gambling games are growing. By putting high barriers on legitimate Indian games, Government will be indirectly promoting foreign gambling based games”.

The gamers believe that similar to how the government provides adequate support to essential businesses, the gaming industry also deserves support and recognition. They highlighted that gaming has the potential to become a significant livelihood opportunity for numerous people in tier 2 and tier 3 towns across India. By fostering the growth of the gaming sector, the government can not only encourage entrepreneurship but also open doors to economic development and employment in small towns.

In their earnest appeal to the government, gamers are advocating for the preservation of their right to access tax-friendly gaming platforms and imploring the government to revisit the 28 per cent GST rate which is punitive in nature.

The gamers also appealed to the government to make a distinction between games of chance like gambling and games of skill like gaming. They firmly asserted that gaming is a skill based activity and cannot be clubbed together with games of luck like gambling and horse racing.