GST ON ONLINE GAMING AND DIGITAL SERVICES: A COMPREHENSIVE ANALYSIS

The rapid advancement of the digital era has significantly elevated the role of online gaming and digital services in India’s economy. With the introduction of the Goods and Services Tax (GST) on July 1, 2017, the Indian government aimed to establish a unified indirect tax regime. However, its application to the digital economy especially to online gaming has sparked intense legal and policy debates. The adoption of GST has brought substantial changes to the tax landscape for digital and online gaming sectors. A major turning point came with the 28% GST imposed on the full-face value of bets, equating skill-based gaming with gambling and betting.

This decision, based on Rule 31A (3) of the CGST Rules, 2017 and recent October 2023 legislative amendments, led to a 412% surge in tax revenue, reaching ₹6,909 crore in just six months. [1]The constitutional validity of this framework is currently under scrutiny in GST Intelligence Directorate v. Games kraft Technologies (P) Ltd., 2023 SCC OnLine SC 1254[2]. This paper explores the effects of GST on these industries by analysing its evolution, regulatory structure, key challenges, supporting legal provisions, economic implications, stakeholder perspectives, and potential future developments.