PM Modi Expresses Interest in Expanding the Future of Digital Technology in India, Including Gaming

INDIA: Hon’ble PM Narendra Modi addressed the gathering at the Digital India Week 2022 Exhibition in Gandhinagar on 4th July, where he spoke about India’s rising prowess in the digital space. He stressed the importance of adapting to contemporary technological advancements and learning how to wield them to better the growth of a country. According to him, a country that is not up to date with modern technology will see little progress.

It is a positive sign for India’s online skill gaming industry that PM is outlining his vision for the digital economy and securing a global spot for India in the AVGC (Animation, Videos, Gaming, & Comics) sector. However, there are contradictions in the position taken by the Prime Minister and the proposed tax valuation GOM on GST for online gaming. The online skill gaming industry will benefit immensely from a progressive tax regime that allows the industry to flourish and supports its growth. With the GoM on GST for online gaming proposing 28% GST on the entire consideration value on online skill gaming platforms, the industry is batting for taxation to be levied on GGR (the revenue earned by the platforms). The last recommendation on online gaming was by the Fitment Committee, which recommended that the “value of supply may be fixed as GGR, which is internationally prevalent” (20th Sept 2019).

To give a boost to the startup ecosystem, the PM also inaugurated a national deep-tech startup platform called the Digital India GENESIS (Gen-next Support for Innovative Startups). In the same vein, he spoke about the potential of technological innovation in India, by saying, “Be it space, mapping, drones, gaming and animation, many such sectors which are going to expand the future of digital technology, have been opened for innovation.” This isn’t the first time the Hon’ble PM has expressed his support for India’s AVGC sector, as the Budget of 2022 also saw him expressing his desire to make India a global gaming hub. In fact, Budget ‘22 was followed by the formation of a task force to enable the growth of this sector, under the command of the PM.

The online gaming industry is expected to grow to become a $5 Billion market opportunity at the current tax rate of 18% on platform fee/GGR. The GoM’s recommendation and the GST council’s decision on whether or not the taxation rate on online skill gaming will increase to 28% on the entire consideration value – is a cause of grave concern for the online skill gaming industry operators. This will be a more than 1000% increase in tax liability. Their apprehension is further fuelled by the different perspectives surging through the states, about games of chance like gambling, casinos, lotteries, etc, being clubbed with online skill gaming and pushed under a standard tax rate on the full value of consideration.

Mauvin Godinho, Minister of Industries, Goa, and a member of the GoM for GST on online gaming has reiterated what other key industry leaders believe–the industry can still roll forward with a hike in taxation, but only as long as it’s imposed on the GGR. In order to realize the aspirations that the Hon’ble Prime Minister of the country has with the country’s gaming sector, it is essential to tax the industry in a way that doesn’t shut the doors on its potential and current functionality.

source https://nrinews24x7.com/pm-modi-expresses-interest-in-expanding-the-future-of-digital-technology-in-india-including-gaming/

July 11, 2022