The igaming industry in India has been offered another opening to challenge PM Modi’s move to elevate the Goods and Service Tax (GST) levy for the sector from 18% to 28%.
A host of gaming firms have pursued further comments from the Indian government in response to a plea filed challenging the tax slab hike, which has led to significant tax evasion notices being handed over to local businesses.
In contrast to lobbying efforts, last year saw India’s GST Council provide plans to bring the GST levy up to 28% for all types of online gaming that involve betting, to essentially equate skill-based games like poker with games of chance in terms of taxation.
Since then, the move has been questioned by multiple online gaming industry bodies, such as the E-Gaming Federation, detailing concerns that this is hurting companies who are now having to lay off staff and forcibly restructure their business strategies.
Moreover, despite the tax increase being officially brought into force in October 2023, in some cases, the issued tax evasion notices go back as far as 2017, leading to legal action being taken against the decision by companies like Indian casino provider Delta Corp.
The aftermath of the tax enforcement saw the NYSE-listed Super Group, parent company of the Betway and Spin brands, announce its withdrawal from the market, declaring that “India was no longer commercially viable”.
Meanwhile, FTSE100 Flutter Entertainment cited forthcoming adjustments for its Indian online rummy room Junglee due to GST charges.
The Supreme Court agreed to a final hearing of cases challenging GST’s decision, which will take place on 2 April 2024.
CasinoBeats Breakdown: For the Indian igaming market the opening few months of 2024 could take on significant importance. The level of growth the market can attain and how much of an opportunity it could be for operators may very well hinge on the level of tax hikes that are introduced, which is evident in the ongoing political tug of war in the sector.
