GST Collection On Online Games Increases Six-Fold To Rs. 1200 Crore

Home » Blog » GST Collection On Online Games Increases Six-Fold To Rs. 1200 Crore

The Interim Budget 2024, which was announced on 1st February 2024, had quite a few talking points. Notably, as this is an election year, the government cannot present a full Annual Budget for this year.

One of the main talking points of the Interim Budget 2024 was the six-fold increase in its GST collection. The GST collection on only online games was Rs. 1200 crore per month, a massive increase from the earlier Rs. 200 crore per month.

Revenue Secretary of the Union Ministry of India, Sanjay Malhotra, also said that the government was satisfied with the results of the tax increase on online games. Notably, from October 2023, the tax levied on the full-face value of bets was increased to 28%.

“The (revenues) are averaging about ₹1,200 crore now, as against ₹200 crore per month that we were getting earlier. (This is) only from online gaming platforms — this does not include casinos, etc. So, there was a huge potential, which was untapped, and which we have been now able to tap,” said Sanjay Malhotra to the reporters.

Several e-gaming companies had not agreed to the 28% increase in tax and have decided to challenge it in court. But as the proceedings in the court are still on, the companies are paying 28% GST tax to the government.

“That dispute is in the court, but going forward, there is no issue — all of them are paying 28%, and they are paying 28% on the actual value,” Revenue Secretary Malhotra told the reporters when asked about the retrospective tax evasion allegations demanding ₹1,12,332 crore from the industry,” added Sanjay Malhotra.

Approximately 71 show-cause letters were issued by GST officers to online gaming enterprises last year in relation to allegations of over Rs 1.12 lakh crore in tax evasion for the fiscal years 2022–2023 and 2023–2024.

Overseas companies have stopped registering in India post this law and the law officers intervene and block their websites as it is unfair for the companies based out of India.

But they change their VPN and get away from this mammoth GST tax percentage, levied by the government.

Notably, the GST Council of India clarified in August 2023 that e-gaming companies and enterprises need to pay 28% GST tax.

The Union Finance Minister presides over the GST Council, which is made up of finance ministers from every state and union territory.

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