India confirms new 28% tax will only impact real money games

The Indian government has announced that online games played without stakes won’t be subject to the new 28% tax, and will continue to be taxed at 18%.

Earlier this month, the Goods and Services Tax Council of India announced that it raised the tax on real money games to 28%. Since the documents included the term ‘’online gaming’’, this led many media outlets to report that all online games in the country would be subjected to the increased tax rate.

However, in a statement to The Economic Times (via GamesIndustry.Biz), Revenue Secretary Sanjay Malhotra confirmed that the new rate “is only when there is a wagering on the outcome of a game, whether it’s a game of skill or chance is not important.’’ 

‘’It is wagering that attracts a higher tax rate,” he said.

Following the confirmation, Hypernova Interactive’s Co-founder and Studio Head Bhimjiyani said in a LinkedIn post: ‘’There is a major misinformation campaign brewing to blur the lines between video games for entertainment and real money games. And this is being done using the simple fact that legacy legal terms such as “Online Gaming” are used to define games where there is a chance to win money back via a wager. These are typically Real Money Games, Fantasy Games or Casino games.’’

‘’We ran a hard fought campaign for a clear distinction between real money games and video games for entertainment! And thanks to the Government of India and MeitY Hon’ Minister Rajeev Chandrasekhar for providing a clear definition in a previous circular!’’, he added.

Also Read: Developers request Indian government to distinguish video games from gambling

Earlier this month, the Indian government also prepared a new framework that will ban games involving betting, user harm and addiction in the country.