5 Esports Sites That Have Been Shutdown Following 28% GST Rule
Ever since the Finance Minister of India Nirmala Sitharaman announced that the Government would be imposing a Goods and Service Tax of 28% on online gaming on 2nd August 2023, there has been a lot of unrest and confusion regarding the impact of the 28% GST on esports in particular.
The 28% GST rule has been a controversial decision, and there are a number of arguments for and against the new tax regulations. While some people argue that the rule is unfair to esports players, as it will make it more expensive for them to participate in tournaments. Others argue that the rule is necessary to generate revenue for the government.
However, it is important to note that the 28% GST has no impact on the esports industry. The new rule only applies to online games that require the players to deposit or put in real money to play the games. These are basically called real money games.
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The 28% GST will be applicable on every deposit that these players make to play the games, which include poker, rummy, and fantasy sports among others. Esports titles, on the other hand, do not require the players to deposit any money to directly play the games.
Esports games can be played by players free of cost. The only time players need to invest money in esports is if they wish to purchase additional features in the game. This could include special passes which give extra benefits, weapons, weapon skins, character skins, additional powers and more. However, one must note that this is not required to directly play the games. Players can simply play the games for free.
Additionally, deposits are not the primary or significant source of revenue for esports organsisers and platforms. Thus the 28% GST on face value on deposits does not have a major impact or rather has a very negligible impact on esports industry.
Therefore there are no esports companies or sites that would have to shut their businesses due to the 28% GST rule. They could shut down for other reasons but not the latest GST imposition.
It is still too early to say what the long-term impact of the 28% GST rule will be on the Indian esports industry. However, it is clear that the rule has had a significant impact in the short term. Only time will tell how the industry will adapt to the new rule.
