(FE)
Growth prospects of any industry depends on clarity of the country’s legal regulatory framework and the tax policies surrounding it. While the former determines the ability to do business, the latter is crucial to decide the feasibility of it. India’s online gaming industry is not indifferent to this principle.
Positive regulatory as well as tax changes have been made in the past few months to give impetus to the sunrise sector. The key one being the amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Online Gaming Rules”)1 which now regulates gaming activities in the online space. By virtue of the new rules, there will soon be a mechanism in place (courtesy self-regulatory bodies) to decide which games will be permissible to be published online, and which will not. Recent amendments to the income tax law clarifying the method of computation of tax on net-winnings from online games2, and progressive decision of the Karnataka High Court negating the demand of tax authorities to charge 28 per cent Goods and Services Tax (GST) levy for skill games (Gameskraft case3) have also been very reassuring for the industry.
