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| Finance Minister Nirmala Seetharaman in a press meeting after the GST Council meet The introduction of a 28% Goods and Services Tax (GST) on online gaming platforms has dramatically transformed the revenue landscape in India. The new tax policy, enforced from October 1, 2023, led to a staggering 412% increase in GST collections, highlighting both the growth of the sector and the government’s efforts to regulate it more effectively. What Changed?  Here is a chart that visualizes the sharp increase in GST revenue from online gaming, comparing the monthly average before and after the implementation of the 28% tax. The revenue jumped from ₹225 crore to ₹1,200 crore Before the new regime, online gaming companies were paying an 18% GST on the commission or fees they charged players. However, with the GST Council’s decision to apply 28% tax on the entire value of bets, revenues skyrocketed. From collecting around ₹225 crore per month, the government’s monthly take has now jumped to ₹1,200 crore, leading to total collections of ₹6,909 crore within six months. Industry Growth vs. Business Impact While this surge in revenue might signal the growing potential of the online gaming industry, it has also raised concerns within the sector. Industry players have expressed reservations about the heavy tax burden, which applies to the full value of bets, not just on the commission or winnings. Many companies argue that this tax structure may stifle innovation and reduce profitability, especially for platforms offering "games of skill". Despite these concerns, the Indian government has maintained its stance, emphasizing the need to bring all forms of gaming under a unified taxation structure to prevent loopholes and tax evasion, which has been an ongoing issue. Key Takeaways
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