Esports community criticises tax diktat, asks to be delineated from gambling

The Indian Esports community has rallied against the announcement by the GST Council to levy 28% GST on the full value of online gaming, horse racing, and casinos, not making any distinction between a 'game of skill and a game of chance.'

Stakeholders in the gaming industry have warned that this could lead to the collapse of the growing Esports fraternity in the country, lead to loss of thousands of jobs, limit Indian companies' ability to invest in innovation and research.

Sagar Nair, Co-founder, and CEO of Qlan, the Gamers' Social Network, said, "The decision of the GST council to impose a 28% tax will have a significant impact on the online gaming industry, which unfortunately includes the Esports community. While we understand that the government needs to impose such measures on casinos, horse racing, and gambling, the higher tax rate is not justified for the competitive gaming community.

"It can discourage new players from entering the market as their hard-earned earnings generated through their efforts just like mainstream athletes will be taxed on the same level as those involved in gambling and other such practices. For the Esports industry to continue its unprecedented growth and recognition on the international stage, it is vital for the government to treat Esports as a separate category with reasonable tax rates that would support the development of the sector"

Following its 50th meet in New Delhi, the Goods and Service Tax (GST) Council announced that it will levy 28% GST on the full value of online gaming along with gambling. Further, the West Bengal GST Council Representative said that the council decided to make an amendment as these are actionable claims.

The GST Council further agreed that there should be no distinction between a 'game of skill and a game of chance.'

Rohit Agarwal, Founder & Director, Alpha Zegus, the next-gen marketing agency specializing in the domains of gaming & lifestyle, said it is unfair to see gambling and online gaming in the same light.

"Esports does not only have a 'win or lose' situation basis luck but has a very big element of skill that determines the outcome of the game. This is not what I expected, and our fight to separate esports from other labels still continues," he said.