Online gamers are asking the finance minister, Nirmala Sitharaman, to reduce the high 28 per cent Goods and Services Tax (GST) on online gaming. They’re worried that such high taxation might lead to the rise of illegal gaming companies.

Gamers from Tier II and Tier III cities, representing ‘Indian Gamers United,’ have written an open letter to the finance minister, expressing concerns that heavy taxation could drive gamers towards unregulated offshore platforms, where they won’t have to pay taxes but will face high risks. They are also requesting the government to differentiate between games of chance (like gambling) and skill-based games (like gaming) when it comes to taxation.

The association emphasizes that gaming requires skill and shouldn’t be treated the same as luck-based activities like gambling and horse racing. Many of these online games offer monetary rewards, enabling young people to earn money in their free time and become part of the gig economy.

However, the GST Council is currently considering imposing a 28 per cent GST on online gaming, casino, and horse racing. This decision has faced criticism from the online gaming industry, and Minister of State for Electronics and IT, Rajeev Chandrasekhar, has suggested that the Council should reconsider the tax rate once a proper regulatory framework for online gaming is established.

On the other hand, Revenue Secretary Sanjay Malhotra has defended the Council’s decision, stating that it was taken unanimously after extensive consultations with stakeholders from the online gaming, casino, and horse racing sectors. He doesn’t see any immediate possibility of reviewing the decision. The final decision on the tax rate will be made during the GST Council’s meeting.