Online Gaming Firms Do Not Have Option To Relocate Overseas To Avoid 28 Percent Tax, Could Violate Laws

Going overseas to avoid the 28 per cent tax is not an option for online gaming firms. If these firms shift abroad, it will violate the foreign exchange laws of the country. However, it has been clarified that the enhanced tax will not be applicable to these firms with retrospective effect.

Vivek Johri, Chairman, Central Board of Indirect Taxes and Customs (CBIC) Said It will not be easy for online gaming firms to shift abroad to avoid tax. “It will be a risky option. Transfer of funds abroad for online gaming is actually illegal. Due to this they may use some other method and this will increase the risk of legal action against them,” he added. He told that foreign online gaming firms providing services in the country will also have to follow the regulations made by the Ministry of Electronics and it may be mandatory for these firms to register in the country.

Earlier this week, the Goods and Services Tax (GST) Council agreed to levy a GST of 28 per cent on the full value of online gaming, horse racing and casinos. GST Council is of the view that there should be no distinction between ‘Game of Skill’ and ‘Game of Chance’. In the last meeting of the Group of Ministers (GoM), there was a consensus on the proposed tax on these activities, but the GoM did not fully agree on online gaming as Goa had proposed to levy only 18 percent tax on the platform fees of online gaming. . In the 50th meeting of the GST Council, it was announced to reduce the tax on restaurants in Cineplex. It has come down from 18 per cent to five per cent.

big online gaming The gaming committee of FICCI, representing firms, has requested CBIC not to increase tax on online gaming. It says that the online gaming industry will suffer a lot because no business can run with such a high tax. Finance Minister Nirmala Sitharaman, who chaired the GST Council, had told that IGST has been removed on cancer medicine and food used for special purposes in the treatment of certain diseases.