India's online real-money gaming industry is back in the Supreme Court. Multiple major gaming companies are challenging the government's decision to collect 28% GST on the full entry fee paid by players. According to reports, as of now, Play Games24x7 and Junglee Games have filed review petitions, while several other online gaming companies are expected to follow the same route.
The case is important because the tax demands are worth more than Rs. 1.5 lakh crore. Gaming companies say that the GST rules were not clear earlier, so applying the tax to previous years is unfair. They believe GST should be charged only on the platform fee they earn from each contest, not on the total amount players pay to join games.
The Supreme Court's decision could shape the future of India's online gaming industry. If the companies win, they could avoid paying massive tax dues. If the government wins, many gaming platforms may have to change how they operate.
India’s tax system is quite different from those of most other countries. In the UK, gaming companies pay tax only on the money they keep after payouts, not on the total amount they take from players. Singapore has a similar approach for licensed operators. Taxation in the US varies from State to State but is largely based on gaming income rather than entrance fees.
Under the regulated system in the Philippines, licensed gaming companies are also taxed on their profits. Brazil has been following a similar trajectory in building its online betting market. India’s 28% GST on the entire contest entry amount is considered one of the harshest tax regimes for online real-money gaming compared to those in other countries.