Stating that a 28 per cent GST on online gaming is badly impacting the online games industry in India, the Skill Online Games Institute (SOGI) on Tuesday urged the Centre and the Goods and Services Tax (GST) Council to take an informed decision on rates so that the domestic industry can grow on a sustainable basis and compete with global players.

“The government had agreed to review the GST rates on online gaming. Finance Minister Nirmala Sitharaman had assured us of a GST rate review after the elections. I am urging that don’t do the review before you have full information on the industry in India and worldwide,” said SOGI Founder President Amrit Kiran Singh.

Singh said that after 28 per cent GST was levied on online gaming last October, the industry in India suffered a setback as many domestic players left due to the impact of the high taxation.

According to SOGI, the Indian online games industry currently worth over USD 3.5 billion and has grown at  35 per cent CAGR in the last five years. The industry, which employs two lakh people and has the potential to grow five-six fold in the near future.

“You are giving the big Indian market as a platter to Chinese companies, while Indian companies are losing business everyday. We are losing markets because it is more expensive to play in India due to high taxation here. In China there is no taxation,” Singh said.

“If you think that the industry is important for the country’s economic growth, then we must compete with the world. We must let Indian companies, who have the expertise in IT, compete with the world. I would urge the government to consider the taxation levels of the US, the UK and China, among others,” he said, adding that SOGI has tied up with the University of Oxford, which is studying  all the regulations and taxations around the world.

SOGI set up in 2023 with the patronage of online gaming companies in India as a repository of all information about online gaming, has also tied up with different IITs and IIMs to work on technical and legal issues of online gaming.

As per a report prepared by Skill Online Games Institute, West Bengal has consistently spent 25 per cent more time on indoor entertainment than the national average over the last four years.

The report shows the time spent on indoor entertainment peaked in January-April 2020 at 3.5 hours per day in the state. There was a general decline in time spent on indoor entertainment from January-April 2020 to September-December 2023, with a final figure of 1.8 hours per day.