In a robust appeal for the advancement of India’s burgeoning online gaming sector, the Skill Online Games Institute (SOGI) has underscored the imperative for informed GST deliberations to secure the industry’s sustainable growth. Spearheading this advocacy, SOGI’s President, Amrit Kiran Singh, illuminated the detrimental repercussions of the current high tax regime, which he asserts has precipitated the exit of domestic players and inadvertently bolstered the position of international competitors.
Amrit Kiran Singh, who stands at the helm of SOGI, a pivotal institution in the online gaming arena, vociferously articulated the need for a re-evaluation of the 28 percent GST imposed on online gaming. This call to action, directed at the Centre and the GST Council, is rooted in the conviction that a recalibrated tax structure is essential for enabling the domestic industry to flourish and hold its ground against global counterparts.
Reflecting on a prior commitment from the Finance Ministry, Singh highlighted Finance Minister Nirmala Sitharaman’s assurance of a GST rate reassessment post-elections. He stressed the criticality of this review being predicated on a comprehensive understanding of both the domestic and international online gaming landscapes. Since the imposition of the hefty 28 percent GST in October last year, the Indian online gaming industry has witnessed significant attrition, with numerous domestic entities being compelled to exit the market.
The Indian online gaming market, valued at over USD 3.5 billion and exhibiting an impressive compound annual growth rate of 35 percent over the past five years, stands as a testament to its potential. Employing over two lakh individuals, the sector is poised for exponential growth, contingent upon a conducive tax environment. Singh cautioned that the current taxation paradigm disproportionately favours foreign entities, particularly from China, where online gaming enjoys a tax-exempt status.
Singh’s plea is clear: to bolster India’s economic growth, domestic gaming companies must be empowered to compete on a global stage. He advocates for a tax framework that mirrors those of leading economies like the US, the UK, and China, ensuring Indian companies, with their robust IT expertise, are not disadvantaged. SOGI, in its strategic partnerships with esteemed institutions like the University of Oxford, IITs, and IIMs, is diligently working to address both technical and legal facets of online gaming regulations.
Further substantiating their position, SOGI’s report reveals intriguing insights into the consumption patterns of indoor entertainment, particularly in West Bengal. The state has consistently outpaced the national average by 25 percent over the past four years in time spent on indoor entertainment. Notably, this peaked during January-April 2020, with an average daily engagement of 3.5 hours, gradually tapering to 1.8 hours by the close of 2023.
The call from SOGI and its president, Amrit Kiran Singh, is unequivocal: a well-informed, nuanced approach to GST policy is crucial for the sustained growth and global competitiveness of India’s online gaming industry.