India’s Game Makers Seek Clarification on Tax Impact

A group of 45 game makers in India has reached out to government authorities to address concerns regarding the impact of a new tax on the gaming industry. The tax, imposed by the Goods and Services Tax (GST) Council, applies to real money gaming (RMG) and has raised concerns about its potential effect on the industry.

RMG involves games where players use their own money in hopes of winning more. The tax imposes a 28% fee on player deposits. While the government clarified that the tax does not apply to mobile games, the use of the term “online gaming” caused confusion about which games and practices would be subject to the tax.

The game makers, which include companies like Firebolt Entertainment and Outlier Games, are urging the government to provide clarity on the matter. They argue that the term “online games” is too broad and causes confusion among gamers, investors, publishers, and media during the GST controversy.

Lucid Labs CEO and founder Chirag Chopra emphasized that the Indian game industry encompasses more than just RMG and investments in the industry have been discouraged due to misconceptions about regulatory practices. Chopra reassured gamers that their beloved games will not be subject to the 28% tax, as it is specifically reserved for RMG.

On the other hand, the RMG industry has expressed concern that the tax could harm their business, as players may be discouraged from playing if they have to pay an additional 28% on their deposits.

Despite the uncertainties surrounding the tax, the Indian gaming industry continues to thrive. In June, India led the way in terms of game downloads, according to Sensor Tower data.