Online gaming companies’ plans to levying of 28 percent GST will limit their ability to invest in new games, impact cash flows as well as business expansion. The GST Council has agreed to impose a 28 percent tax on online gaming, casinos and horse racing. The tax would be levied on the full face value.

The All India Gaming Federation (AIGF), which represents companies like Nazara, GamesKraft, Zupee and Winzo, said the decision by the council is unconstitutional, irrational, and egregious.

"The decision ignores over 60 years of settled legal jurisprudence and lumps online skill gaming with gambling activities. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses and the only people benefitting from this will be anti-national illegal offshore platforms,” says AIGF CEO Roland Landers.

Landers says, when the central government has been supporting the industry, it is unfortunate that such a legally untenable decision has been taken, ignoring the views of most GoM states who studied this matter in detail.

Online gaming players have repeatedly urged the government and the GST Council to levy 18 per cent GST on their segment instead of 28 per cent that was recommended by Group of Ministers (GoM).

"The implementation of a 28 percent tax rate will bring significant challenges to the gaming industry. This higher tax burden will impact companies' cash flows, limiting their ability to invest in innovation, research, and business expansion," IndiaPlays COO Aaditya Shah says.

According to reports, the skill-based games and apps engaged in betting or casinos should not be treated in the same manner.