In its earlier report submitted to the Council in June, the Group of Ministers (GoM), led by Meghalaya Chief Minister Conrad Sangma, proposed a 28 percent GST on the entire consideration, including contest entry fees, paid by the player, without distinguishing between skill games and chance games. The Council, however, had asked the GoM to reconsider its report.
Shares of Nazara Technologies are up by 2.03 percent than previous close on the BSE at Rs 603 as investors are cheering temporary respite after the group of ministers (GoM) on GST rates have failed to reach a consensus on the amount to be taxed in the case of online gaming and casinos. Meanwhile Delta Corp shares are at Rs 222, down 0.9 percent from the previous close on the BSE.
According to sources that reported to news agency PTI, The panel is likely to stick with its earlier recommendation of a 28 per cent levy on these segments, while the final valuation mechanism will be logged on to the court of the GST Council.
In its earlier report submitted to the Council in June, the Group of Ministers (GoM), led by Meghalaya Chief Minister Conrad Sangma, proposed a 28 percent GST on the entire consideration, including contest entry fees, paid by the player, without distinguishing between skill games and chance games. The Council, however, had asked the GoM to reconsider its report.
Afterwards, the GoM met with stakeholders from the online gaming industry and took the Attorney General’s views into consideration.
Although the GoM deliberated on separate definitions for ‘games of skill’ and ‘games of chance’, it finally decided to tax both as demerit goods attracting a 28 percent GST.
Charging 28 percent GST on the entire amount, which a player deposits for a game for both categories of online game, would reduce the prize money left for distribution and drive away players from legitimate tax-deducting portals. This may also encourage online gamers towards unlawful portals that do not deduct tax, sector experts had told PTI.
During the COVID-19-induced lockdown, online gaming in India experienced a surge with a substantial increase in users. According to a KPMG report, the online gaming sector will grow to Rs 29,000 crore by 2024-25.
Diversified gaming startup Nazara Technologies reported a 13.7 percent increase in its net profit at INR 17.4 Cr in the July-September quarter of the year backed by a strong growth trend across its portfolio.
The startup’s net profit stood at INR 15.3 Cr in the corresponding quarter last year.
(Edited by : Abhishek Jha)
link
