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Skill-based online gaming should be treated differently from gambling and betting: IndiaTech’s letter to Finance Ministry

The tech industry association, which counts Dream11 and MPL as its members, said that higher tax rates will adversely impact the growth of the industry.

“Online skill-based gaming should be treated differently from gambling, betting and horse racing,” read a letter sent by IndiaTech, a tech industry association representing India’s consumer internet start-ups and investors, laying down recommendations it would like the finance ministry to consider while drafting a framework for online games of skill. The industry body sought clarification to be issued that Rule 31A of the CGST Rules 2017 will not cover games of skill. The rule mandates that the taxable amount will include the face value of the entire bet including the winnings. Moreover, it recommended that the rule must not be applicable to any form of online gaming where there is a preponderance of skill over chance, thereby covering online fantasy sports effectively. Dream11 and MPL are two of the prominent members of IndiaTech. IndiaTech is an influential body comprising some of the biggest start-ups present in India. There has been a lot of chatter about how to regulate online games which have flourished in the last few years. It must also be noted that the budget for 2022-23 will be unveiled next week. Recommendations made by IndiaTech Evaluating Actionable Claim The association wants the finance ministry to consider only Gross Gaming Revenue (GGR) or the platform fee as the value of supply continuing the current practice. “Additionally, if there are other formats/ revenue models followed by platforms such as subscription fee, in-game revenue etc., in such cases GST should be applicable on only the amount that is received by the…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

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