Indian Esports exempted from decision to impose 28% GST on online gaming

In the recently conducted 50th meet of the Goods and Service Tax (GST) Council in New Delhi, it was announced that 28% GST will be levied on the full value of online gaming, horse racing, and casinos. Further, the GST Council agreed that there should be no distinction between a 'game of skill and a game of chance.'

It has now been clarified that the recent GST ruling will have no impact on Esports in India.

Mr. Vinod Tiwari, President of the Esports Federation of India (ESFI) and Acting Director General of the Olympic Council of Asia states, “It is imperative to first understand that the 28% GST is going to apply to the iGaming sector, including Real Money Gaming (RMG), fantasy sports, teen patti, rummy, and poker which are categorized under gambling or betting in the rest of the world. Contrary to some media reports, this GST is neither applicable nor will it have any impact on the ‘Video Games’ or the Esports industry.”

“Esports has been officially recognized as a sport by the government which finally and thankfully distinguishes it from any activities like iGaming such as fantasy, teen patti, rummy, poker, betting, and gambling, among others. It will carry on to be taxed the way it always has been. Theories of 'game of skill' and 'game of chance' which only exist in our country neither apply nor are relevant in the Esports ecosystem,” says Mr. Tiwari.

According to Mr. Tiwari, the confusion could have been avoided if the more specific term “iGaming” was used instead of the broad umbrella term of “online gaming” in the new regulation.

"We must acknowledge the truth that the primary objective of the 400 million Indian video gamers (and approximately 3 billion gamers worldwide) is ‘purely entertainment’, and not financial gains or making money. It is regrettable that in India, our Video Games or Esports Industry is often unjustifiably associated with 'iGaming, betting, RMG, gambling, and many more, which creates unnecessary confusion and misperceptions," he adds.

Additionally, it is crucial to highlight that video game publishers have strict policies against implementing entry fees for any Esports events organized using their video games, further separating it from iGaming.

Esports is all set to make its Asiad debut at the upcoming Hangzhou Asian Games.

Under this discipline, India will participate in League of Legends, FIFA Online 4, Street Fighter V: Champion Edition, and DOTA 2.