The online gaming and esports companies anticipate that the Centre will make clear the taxes system and set aside specific funds to build the necessary infrastructure for the sector in the next Interim Budget 2024. On February 1, Finance Minister Nirmala Sitharaman will present the budget.
The year 2023 has been especially significant for the online gaming industry. The Goods and Services Tax (GST) Council made the decision to levy a general tax of 28% on internet gaming in July. Previously, skill gaming platforms had to pay 18% GST on their platform fees, which is sometimes referred to as gross gaming revenue (GGR). There is no differentiation between games of skill and games of chance in the new regulations. The Council also established rules for punitive action against foreign providers of online gambling, including website blocking, and mandated registration for them.
The modifications took effect on October 1, 2023. On the other hand, an assessment of the modifications' effects is scheduled for March of this year. Co-founder of Gamezop Gaurav Agarwal stated that the industry needs help and that it is "crucial". The Mobile Premier League's (MPL) chief operating officer, Namratha Swamy, stated that the industry must embrace a progressive taxation structure in addition to clarity.
"This clarity is crucial for driving the next phase of growth, as it will not only provide a conducive environment for businesses but also revive investor confidence in the sectorA progressive taxation regime will further incentivise investment, leading to the creation of more job opportunities for our talented youth," she stated.
"It is time for India to transition from being the largest consumer of content to becoming the largest creator of content," Agarwal stated. Furthermore, Namratha mentioned that the sector anticipates that the Budget would open the door for the creation of courses specifically focused on gaming.
"These courses will play a pivotal role in nurturing the next generation of game developers and professionals, ensuring a steady supply of skilled talent to fuel the industry's growth."
On the other hand, esports organisations and firms stated that they anticipate a specific funding source for the industry because it has room to expand following its designation as an official medal sport for the Asian Games in 2022.
"We hope to see a dedicated allocation of funds for the esports sector for the establishment of infrastructure necessary for the industry's development and to nurture an esports ecosystem that positions India as a global esports hub," stated Lokesh Suji, director of the Esports Federation of India and vice president of the Asian Esports Federation.
"To ensure the long-term success of our esports athletes and attract more aspiring players to pursue careers in esports, we also hope for tax relief for athletes on winnings from esports tournaments," Suji stated.
Furthermore, it was said by Rohit Agarwal, the creator and director of the game marketing firm Alpha Zegus, that the tax rate on esports ought to be reduced from 28% to 18%.
"From budget 2024, one of the major steps I look forward to is more 'esports' based activities moving to 18 per cent slab (from 28 per cent slab)," he stated. He continued by saying that the esports sector is anticipating the Center's encouragement of further state governments to allocate funds for the development and promotion of esports.
The Bihar government has already said that esports would be taught in college and high school curricula. Additionally, it held the state's open esports championship. According to experts, money needs to be allotted to each state so that comparable competitions can be held in each.
The CEO of Bengaluru-based esports startup Gods Reign, KR Rohith, said, "We sincerely suggest the allocation of funds to each state government for the organization and promotion of State Esports Championships."
Like Namratha, Rohith recommended training courses for the industry.
"Recognising the exponential growth of the video gaming industry, we hope for the government's consideration and support in encouraging educational programmes by adding esports into educational curriculums and skill development initiatives focused on gaming and esports," he stated.
"This would contribute significantly to nurturing talent within the sector, aligning with the national agenda of promoting digital skills."
