As we know, e-gaming will attract a flat 28 per cent GST. India is a potential gaming hub. It is likely to become a $30 billion market by 2030.

It is necessary to distinguish between games such as racing, casinos lottery and the skill-based online games such as fantasy sports, rummy. To illustrate, Games24x7 operates several popular games such as Rummy-Circle, U Games, My II Circle and PlayCircle. This is a sunrise sector which must be dissociated with online gambling.

For skill-based games, platform owners have no right, title or interest over the prize pool amount. The prize does not form part of the value of services provided by the platform. Hence, currently, no GST is being paid by the technology platform on the prize pool. However, if the contest entry fee is taxed, the burden increases on both the gaming platform and users. It may foster a black market. Legitimate skill games will be stifled and unscrupulous gambling business will continue to operate.

Even now despite their being illegal, all kinds of betting and gambling business continue to operate.

The distinction must be made between games of chance and games of skill. Games of chance or gambling has always been taxed at a higher rate, say 28 per cent. However, games of skill has been subjected to a lower GST.

The FDI attracted by the gaming sector may suffer. It may affect the growth prospects of this growing sector.