The Indian government is establishing an inter-departmental panel to ensure regulatory compliance by online gaming platforms, amid rapid growth in the sector. The committee will include officials from the Enforcement Directorate (ED), the Reserve Bank of India (RBI), and departments for tax and consumer affairs. This move is aimed at bringing more stringent oversight to the burgeoning online gaming industry.
The Directorate General of GST Intelligence (DGGI) has already taken action against 118 domestic gaming platforms, issuing show-cause notices to 34 entities for unpaid taxes amounting to ₹1.10 lakh crore. Several of these companies have approached the Supreme Court, which is currently hearing the case.
Recent amendments to the Central Goods and Services Tax (CGST) Act and the Integrated Goods and Services Tax (IGST) Act, effective from October 1, 2023, provide much-needed clarity on the taxation of casinos, horse racing, and online gaming. The updates aim to create a level playing field between domestic and foreign gaming operators. Foreign-based platforms providing services in India are now required to register under the GST law, with penalties including website blocking for non-compliance.
The online gaming industry, which grew at a 28% compound annual growth rate (CAGR) post-COVID, reached a market size of ₹16,428 crore in FY 2023-24, emphasizing the need for tighter regulations.
