EMERGING MARKETS
Unlocking India : Strict taxes in a growing market
Dan Kleiner examines the severity of tax rules on igaming for affiliates and operators in India , the principal drivers of the market ’ s recent growth and what it takes for affiliates to enter and scale
In May India went to the polls for the first time in five years , an occasion that saw Narendra Modi ’ s Bharatiya Janata Party ( BJP ) secure a third term in office . The election offers India the opportunity to build on its igaming laws , despite the failure of the BJP to secure an outright majority .
Currently , skill-based games with no element of luck can be offered without a licence in most states . Games based on luck are banned under current regulations in India . In 2023 , the Ministry of Electronics and Information Technology ( MEITY ) introduced the IT rules , aiming to regulate and give stronger clarification for online gaming . The rules and subsequent amendments permitted online real-money games with regulatory approval .
Vidushpat Singhania , managing partner at New Delhi-based law firm Krida Legal , believes that the introduction of the IT rules “ was seen as a landmark moment for the Indian online gaming industry and largely lauded by the industry ”.
Tax quake
The next amendment came with changes to income tax , which was complicated by media reports that the Goods & Services Tax ( GST ) Council sought to place a 28 % tax on the value of all bets .
“ The industry felt that MEITY ’ s rules and clarity in direct taxation were steps that would give the industry a launchpad to succeed at a global level , but the reports on the 28 % tax had the industry worried ,” says Singhania .
He claims that after several representations , the government restricted GST to first-time deposits only , not every bet , but the sector still has strong concerns .
“ The Indian igaming industry thought they could sustain this for a while until a review of the GST imposition could take place , but retrospective demand of GST on
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