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No cheat-code for online gaming industry as ministry, I-T turn up the heat

New Delhi, October 8, 2022

The income tax (I-T) department recently issued show-cause notices to seven online game companies, as part of an investigation into possible tax evasion by such institutions.

The Ministry of Information and Broadcasting on Tuesday issued a new advisory requesting television and digital media platforms to not play ads for online betting sites. The All India Gaming Federation welcomed the new diktat.

The call for stricter centralised regulations in the online gaming sector has grown in the recent days, especially after the income tax (I-T) department recently issued show-cause notices to seven online game companies, as part of an investigation into possible tax evasion by such institutions.

Simultaneously, with the rapid spread of smartphones with immersive graphics to tier-2 and tier-3 cities, favourable demographics and affordable data services, online gaming is proving to be one of the fastest growing sectors in the entertainment space. Here’s a look at the major developments on this front.

According to the All India Gaming Federation at present the gaming industry has created 40,000–50,000 jobs directly and in the next 5 years the industry is expected to employ around 200,000 people

The Indian online gaming industry pays GST of over Rs 2,200 crore, according to a recent study by EY and Assocham

According to a KPMG report dated 2022, Currently, there are more than 400 gaming companies in India

According to the Redseer report, the share of new paying users in gaming grew from 40 per cent in FY20 to 50 per cent FY21, as the ease in monetisation meant more gamers were willing to pay for their gaming experience.

[The Business Standard]

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