SOGI advocates applying the 28% GST on Gaming platform fees

 

 

The Skill Online Games Institute (SOGI), an industry body backed by real money gaming firms, has called on the Indian government to levy a 28% Goods and Services Tax (GST) on platform fees rather than on deposits for gaming companies. This proposal aims to address concerns over offshore platforms benefiting from significant tax arbitrage due to the current tax framework.

SOGI highlights that taxing deposits rather than platform fees could unintentionally hurt Indian gaming firms while creating a competitive advantage for foreign-based platforms. The discrepancy arises because offshore platforms can operate without adhering to India's tax regulations, exploiting gaps in the system.

Amrit Kiran Singh, President, SOGI, said the online gaming industry is in a nascent stage and the government and industry need to work together to harness the full positives of this industry for the economy and country. Recommendations were put forth by the Skill Online Games Institute (SOGI) to the Indian government, highlighting strategies to harness the gaming industry's potential for job creation and GDP contribution while addressing concerns such as addiction.

 
The organization also emphasizes the ineffectiveness of blocking or banning such platforms, pointing to the practice of "domain farming." Domain farming involves registering and managing multiple domain names, allowing operators to quickly switch to new domains if their current ones are blocked. This practice undermines enforcement efforts and highlights the need for a more robust tax structure that focuses on regulating revenue streams like platform fees.