GST: Rajeev Chandrasekhar to Urge GST Council for Reconsideration of 28% Tax on Online Gaming

At an event on Monday, Minister of State Rajeev Chandrasekhar stated that the Ministry of Electronics and IT, which serves as the nodal ministry overseeing online gaming regulations, plans to request the GST Council to review its decision to impose a 28% tax on online gaming. This request will be made once a comprehensive regulatory framework for online gaming is in place.

"We are in the starting phase of establishing a viable and permissible online gaming framework. Once this framework is developed, we will approach the GST Council and seek their reconsideration based on the new regulatory guidelines.

n July 11, the GST Council announced its decision to impose a 28% goods and service tax on the turnover of online gaming companies, horse racing, and casinos.

Rajeev Chandrasekhar made it clear that the GST Council is a federal body consisting of representatives from all state governments. They have been working on this issue for the past three years, while the regulatory framework for online gaming only began in January 2023.

He emphasized that the process of creating a framework for online gaming took time and involved discussions and consultations. Despite the concerns raised by the online gaming industry over the GST Council's decision, Chandrasekhar suggested proceeding cautiously with regulation and avoiding hasty actions driven by reactions.

He emphasized the importance of creating sustainable frameworks for the digital space, considering long-term perspectives rather than reacting hastily to industry or startup grievances. Chandrasekhar mentioned that the government believes in thorough consultations with stakeholders and taking their views into account. 

In the case of online gaming rules, the government engaged in 3.5 months of consultations, leading to significant changes in the initial proposals.

The underlying message is to prioritize doing things right, even if it takes time, rather than rushing into decisions that might lead to unintended consequences. The government aims to build robust and well-thought-out regulatory frameworks for the digital space, aligning with the vision for the next decade.

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